Journal Of The Madras University, Vol. XIII, No. 1

PUBLISHES Try 7T-;E UK ] V i: PS- TTY.

? 2 2

Volume XIII, No. I

January, 1941

JOURNAL

OF THE

MADRAS UNIVERSITY

Editor

S. S. SURYAXARAYAXA SaSTKI
Editorial Board

V. K. Aiyappan Pillai Dr. E. Asirvatham

R Gopala Aytar Dr M. Damodaram

M. O. Pa rtoa&ar a thy Dr. P. J. Thomas

Ayyancar

Sri K. A. Nilaxanta Sastiu

PUBLISHED BY THE UNIVERSITY

1M1

TABLE OF CONTENTS

Pack

1. WORLD ECONOMY AFTER 'I HE WAR

By P. J. Thomas .. i

2. A NEW WORLD ORDER

By Sir J. C. Cotaji a

3. WORLD ECONOMY OF THE FUTURE

By P*or. V. G. Kale .. 17

4. INTERNATIONAL MONETARY RELATIONS

By V. L. DSocza .. 23

5. WORLD ECONOMY AFTER THE WAR

By P. S. Lokanatham .. 29

8. ECONOMIC FACTORS IN AGRICULTURAL DEVE-
LOPMENT

By K. C. RaMAKKISHNAN .. 36

7. STUDIES ON THE CHEMISTRY AND BIOLOGY
OF PONDS IN THE MADRAS CITY

By S. V. Ganapaxi .. 55

8. STUDIES IN INDIAN PAINTING

By S. Paramasivan .. 70

9. DR SAMUEL BROWN

By D. V. S. Ruor .. 84

10. THE THEORY OF TWO KOPPERUNJINGAS

By V. V km kata Scuba Ayyab .. 98

11. PANANGUDI AGASTISVARA TEMPLE

By S. R. Balascmahmanvan and K. Vcnkataranga
Raju .. 101

12. IS THE GITA A GOSPEL OF WAR ?

By T. M. P. Maiiadevax .. 105

13. RELIGION - TRUE AND FALSE

By P. Nagahaja Rao .. 114

14. REVIEWS: —

Pack
.. 120

Oxford Pamphlets on World Affairs
Anandarahga Pillai : The ' Pepys ’ of French India.

By Rao Sakes C. S. Srlmyasachah:

The Early History of Ceylon. By G. C. Mexdis
H ow India is Governed. By N. S. Pabdasanx
Great men of India, > The Home Library

and Modern Scientific Though! ( Club.
Revision of Democracy. By A. Appadorai
The Number of Rasas. By Dr. V. Raguavan
Upper School Algebra. By L. Crossi.and
Odd Numbers or Arithmetic Revised. By Human 1
McKay

TTic Silappadikaram or ’ The Lay of the Anklet ’

By V. R. RaKACHA-VDBA DlKSlUTAR

15. ACKNOWLEDGMENTS

.. 145

SUPPLr.MKfCT

BESANT MEMORIAL LECTURES
By Sa P. S. Sxvaswamy Aiyar

I. AHIMSA .. 1

II. ASANGA

11

TABLE OF CONTENTS

Pack

1. NALANDA

By K. A. Nilakavta S.astbi .. 147

2. SOME PROBLEMS IN PANINI

By K. Madhava Krishna Sark a. M.O.L. .. 203

3. THE SPERMATOGENESIS OF CHTLOSCYLLIUM

GRISEUM (MOLLER & HENLE)

By (Miss) C. K. Ratnavattiy, M.Sc. ..220

4. THE THEORY OF TWO KOPPFRURJINGAS

By S. R. Balasvbiuituaxyan .. 204

5. UNIVERSITY NOTES .. 207

0. REVIEWS .. 270

1 . BhagavndgTtflrtl»npr»kAsiVS: By Upanmad-Brahma-

Yocim

2. The Theory of Proper Names. By Alan H. Gardintn

3. The Tmvnnrore Tribes and Castes. Vo!. III. The
Ahorjinc* of Travancorc: By L. A. Krishna Aiytr

4. The Religious Policy of the Mughal Emperors: By Sri
Ram Sharma

5. The ParamArthasara of Adi Sew: Edited by S.
S. SrRYANARAYAWA SaSTW

6. P»J1 Rao TT nrd the En*t India Company. 1790-1818.
By P. C. Gcpta

7. Statistical Year Book of the League of Nations—
1939-40.

8. The Viceroy and Governor-Genera! of India. By A.

B. Rudra

9. Oxford Pamohlets on World Affairs

10. Sampnya Vedanta Upanishads. English Translation.
By T. R. Srinivasa Aitangar and S. Subrahmanta
Sastri

11. History of the Kammas. Part II. By Kotta Bhavayya
Choudhri.

CONTENTS- (Conti)

Pace

7. LIST OF ACKNOWLEDGMENTS .. 238

SUPPLEMENT:

THE QUEST AFTER PERFECTION ( Principal
Miller Endowment Lectures, 1940-41)

By M. Huoyaxxa •• 1-28

WORLD ECONOMY AFTER THE WAR.
By

P. J. Thomas

Professor of Economics, U*ix>ersity of Madras.

The present war is largely one of rival ideologies. Nazi Ger-
many is fighting not merely for tcbeusreum but for the domination
of other nations. Ihe world order which the Nazis want to replace
is defective in many ways, and this has given some help to Nazi
designs. Therefore while we must exert every nerve to defeat the
Nazis, we must also give our earnest attention to tho building up
of n better world order than the old effete one.

The Old Order

The old order evolved as a result of the Industrial Revolution
in Europe. With the help of a new industrial technique invented in
the latter part of the 18th century*, the nations of Europe were able
to evolve a new industrial civilization based on mass production
and cheap transport, the steam engine being the basis of both.
The extensive use of steam ships and railways gave a great impetus
to world commerce and ushered in a new international economy.
Under it industry flourished in Western Europe and North America,
while other lands, mostly in Asia and South America, specialized
in the production of raw materials and foodstuffs. England was
the pioneer of industry and commerce, but later Germany, France
and U.S.A. followed suit. Owing to a fairly general assent on the
goal of laisscz faire, trade over a large part of the world was un-
hampered by tariffs for long, and therefore there was great pros-
perity in countries specializing in industry and trade. But all this
changed after 1914. By the rising surge of economic nationalism,
international trade came to be hampered by tariffs and other
barriers. Capitalism came under a serious challenge, led by Soviet
Russia. International rivalries became bitter and resulted in the
world war of 1914-18; and to-day wc arc in the midst of a more

serious world struggle. The old order is nearly dead.

JOURNAL OF THE MADRAS UNIVERSITY

The world order that is now passing away had several serious
defects. Firstly, while the industrialists grew in wealth and power,
those who raised primary products did not have any reasonable
share in it. Agriculture has always been the Cinderella of the
economic system; it has done the dirty jobs, but the profits went
largely to industry and trade. As Sir Thomas Middleton bluntly
puts it: “Commerce, industry, finance and the services have by
skill and organisation used to their own advantage the cheap raw
products of the soiL” This is borne out by the statistics of income
in the different countries. In the U.SA.. a country of large farms,
the annual income per head oi persons engaged in agriculture is
about Rs. 900 and that of persons engaged in industry about
Rs. 2,300. Thus the agriculturist obtains only 40% of the industria-
list’s income. The difference is much wider in countries where
agriculture is pursued by peasants, as in India and China. In
England, where agriculture plays too small a part, the farmer makes
little profit. Even so cautious a statistician as Lord Stamp has
hararded the view that -the world as a whole and over a given
length of time has been led below coal price for the last 100 years,
if one takes into account the proper element* of cost." This was
perhaps due to the lock of effective organisation among agricultu-
rists and to the inelasticity of the supply of primary products, but
there it is. In the result there has grown a yawning gulf between
tho few wealthy industrial nations and the many impecunious agri-
cultural countries. Tho average American has an income of
Rs. 2,000, but the average Indian has hardly Rs. 80 and the average
Chinaman Rs. 60. Therefore while the standard of living went on
rising rapidly in the West, it remained fairly steady at the old des-
picable lovels elsewhere, especially in Asia. Thus, India and China
which contain nearly half the world's population are still steeped in
poverty and misery.

Secondly, even with the prosperous industrial nations, the pro-
fits from industry and trade were so unevenly distributed that the
masses have remained comparatively poor. In spite of the great
prosperity of modern England, half the population is living on
inadequate diet, according to recent enquiries, and about a million
persons arc still unemployed with all the rearmament efforts late-
ly’. The International economy gave splendid opportunities to
clever organisers and captains of industry; it made some of them
multi-millionaires, but the lot of workers remained poor. “Morgan
smiles and there is sunshine in millions of homes: Melchett frowns
and there is starvation in countless families." This was fit ground

WORLD ECONOMY AFTER THE WAR 3

for the growth of Communism on the one hand and Fascism on the
other.

Hie existence of poor but populous nations and the abundance
of poverty in wealthy countries placed serious impediments on the
onward march of prosperous nations and eventually Inflicted a
crushing blow on world economy. Large scale industry could only
prosper when there is an expanding market, but the market could
expand only If the masses obtain a steady supply of purchasing
power. This was not possible without a fairly equitable distribu-
tion of wealth within nations and between nations. Hence the re-
curring slumps and the persistent unemployment which have pur-
sued the West for long. The economic crisis of 1929-30 unbalanced
world economy, and we cannot prevent Its recurrence unless world
economy Is rebuilt on more equitable foundations. Above ill. the
purchasing power of the masses In India and China must Increase
rapidly if economic Internationalism Is to be set on Its feet again.
The Industrialist believed that be could prosper at the expense of
the agriculturist; but it bas been demonstrated thnl this was tho
height of unwisdom. Induatrial nations have to take the agricul-
tural countries along with them if they wish to lx* prosperous. The
great commandment “Thou shall lose thy neighbour as thyself"
Is not merely for our spiritual good: II Is surely needed for our
material advantage as well.

In spite of such serious defects, the old world economy would
have functioned better and lasted longer had the nations of Ihe
West entered Into some working understanding among themselves.
Sum- of them held sway over vast territories and this roused the
cupidity of others. Germany which always claimed a unique posi-
tion in Europe has long hungered for a predominant place In world
economy: its nmbition was hafUcd in 191«. but It sought to wreak
vengeance by forging all the engines of destruction which modem
science is capable of and this has resulted In the present titanic
struggle. If Germany succeeds, all that is most valuable in the
present civihration will be in peril. Germany’s designs could have
been thwarted, nay aborted, had the nations that value freedom
joined together betimes In fraternal effort. But this was not to be.
The League of Nations had pious ideals before it. but it had not
the slightest power of coercion over its members, and it has failed
mi-erablv to avert the crisis. Not only has Germany mined the
freedom of several nation?: it now proposes to set up a Nazi system
over all Europe and perhaps over the whole world. All those who
value freedom have to fight against this, and must fight to a finish.

4

JOURNAL OF THE MADRAS UNIVERSITY

We now want a new world order. It must defend civilization
against aggression from avaricious nations who want to dominate
over others. It must ensure the world against recurring slumps
and depressions. It must maximize the happiness of the world,
even if this would reduce slightly the comforts of the few who are
now wealthy. It must raise the standard of living of tho masses
in all countries and especially among the teeming millions of Asia.
Above all, it must ensure a modicum of freedom to individuals and
to national groups; for. personal liberty is the most valued of man's
possessions. Sovietism and Nazism offer to do many good things,
hut that they will destroy freedom is certain and this makes both
of them o menace to civilized existence.

The remarkable scientific and technological progress in the last
one hundred years has made it possible to produce enough commo-
difies so ns to enable the whole of the world’s population of 2001)
millions to live In comfort, but politics has forged power-
ful barriers against such a consummation In a world which has
shrunk Incredibly by the ease of communication and transport,
mankind can live happily together, but certain selfish nations who
want to dominate over others ha\-c set up autarchic systems by
conjuring up bogeys like *!eben sranm' and 'population pressure’
and have embarked on a war of aggression. Tt may be that we will
bo able to frustrate their designs, but they or others may rise again
for the same nefarious designs. lienee the urgent need for nil free
nations to enter Into some friendly alliance for common objects.

Wanted — A Co-operative Order

About the form of this future order, various opinions have been
put forward. Whatever be the exact constitution of the new union,
certain fundamental principles seem clear.

•Rio union must have a common defence organization, a unified
currency system and well-adjusted trade relations. TTiis involves
a material sacrifice of national sovereignty. The tiny nation-states
of Europe have prized their independence greatly, but recent
events show that it is not so easy to keep it intact in these days.
Within a short time. Poland. Norway. Denmark. Belgium. Holland
and even powerful France have had to lose their national indepen-
dence. Modem science has perfected the art of warfare, and with
its aid a powerful nation which has no faith in international justice
and which believes in Machiavellian ethics can overthrow the
independence of many nations around it Hence the futility of

WORLD ECONOMY AFTER TIE WAR 5

independence in a world like the present The need of the hour is
for a union of free peoples for defending themselves against wanton
aggression from outside. A common army, navy and air force
will entail economy for all. For the cost of defence, the Union
must have power to raise revenues directly. The League of Na-
tions failed because it had only powers of moral coercion and noth-
ing stronger.

The organization must be co-operative in outlook. The motto
of co-operation is " All for each and each for all.” The free na-
tions must co-operate for their economic progress, because all can
attain a higher standard of living. If they work amicably. On the
other hand, if they work in competition, some msy be better off,
but the majority will be worse off: and even those who ore better^
of! will not be able to maintain their prosperity for long, as they
ore sure to fall out among themselves. We have seen this demons-
trated in the recent post. In order that the nations may co-operate,
the causes of rivalry between them must be removed. The old
idea of some countries helng Industrialists and others being agri-
culturists must be abandoned. Every country can have some In-
dustries nfter a certain level of development, and every country
must al«o grow n considerable part of its foodstuffs. For the rest,
nil must depend on external trade. It u possible to reconcile the
conflicting Interest* of various nations. If there Is a spirit of give
and take. This work must be done by an Influential commission
set up by the Union authorities. In this wav. trade barriers bet-
ween nations can be gradually removed, and the whole of the
union territory can be brought under free trade, to the great ad-
vantage of all. With the fall of tariffs, prices also will fall, and
this would bring abort , n immediate rise in the Standard of living
of the masses.

Within each State also, economic life must be organised more
or less on the co-operative basis. Laissez Cairo or free competition
has led to n great deal of economic waste and it has failed in solving
the problem of poverty. Under a system of free competition,
powerful monopolies are bound to arise and thus defeat the very
object of competition. The gulf between rich and poor has thus
become wider. Cooperation would provide a far more equitable
basis, especially in consumption and in the production require-
ments of agriculturists. It must be admitted that co-operative
production has not been a great sticcess in large-scale industry,
nnd there is still need for private enterprise and State effort, provid-
ed these will also be worked in the co-operative spirit Public utili-

6 JOURNAL OF THE MADRAS UNIVERSITY

ties must be largely owned by the State or local authorities ar.d
over all the key industries, the supervision of the State must be
minute and strict. The whole economic system must be worked
with a view to toning down inequalities of distribution. As the
“Times” of London put it lately, planned consumption mast be the
motto, and if this is to be a fact, the whole economic life must be
shot through and through with the co-operative spirit. The "bog-
par my neighbour” policy must be crushed both in the International
and in the intranational spheres.

In rognrd to monetary policy, it Is not essential that there
should be n common currency for all the members of the Union.
Each may have its own national currency, provided it is pepped at
given values in terms of the notes of an International Bank set up
under the control of the Union. Such n Bank will expand or con-
tract its note issue In order to help national monetary policies
designed to olT-set booms and depressions. It must also operate an
international exchange equalisation fund in order to counteract
speculative movements of short-term capital.

Tli* Eastern Market Hold* the Kay

Such a currency system and the co-operative organisation of
economic activity will greatly help in preventing booms and slumps,
but world economy will not function harmoniously unless the
standard of living rises among the poverty-stricken masses of
Asiatic countries. This is only possible by giving them steadier
employment. TTwreforr one of the prime objectives of the Union
must be a development programme in India and China. This Is
not to be regarded as a charity concern, but as a safe business pro-
position. The disequilibrium of world economy to-day is largely
due to the lack of purchasing power in the thickly populated coun-
tries of Asia, and Western industrialists must welcome this as it will
provide a steadily growing demand for their goods. The economic
development of the East may obviate its need for ordinary con-
sumption goods (textiles and sugar) . but it would create a steady
demand for machinery and other capital goods, and subsequently
when the standard of living rises, as is bound to. there will also
be a growing demand for high-grade consumption goods, which
only the West can supply. Many industrialists in the West have
realized the possible beneficial repurcussions of Eastern industri-
alization on the West and have welcomed it. Henry Ford was once
asked at a dinner what he thought was the way to a stable world
recovery. He took his pencil and wrote on the table cloth the

WORLD ECONOMY AFTER THE WAR

7

numbers *160', *350’ and ‘400’, meaning thereby the potential pur-
chasing power of Russia, India and China.

The importance of the Eastern market will be great, especially
in the period immediately after the present war, when a severe
depression is bound to arise. The development of the East has
therefore to play a great part in the consideration of post-war
problems.

For making a beginning in such a co-operative union, we must
look to the British Commonwealth of Nations and the U.S.A. The
British Empire can by itself make a beginning by transforming the
Empire into a federal union. The British Empire is not a contigu-
ous territory, but the British territories in the East are fairly near
together. In the light of this, it was wise to have summoned
a conference in Delhi of representatives from all the British
territories in the East. The object oi the Conference, let it bo
noted, was not merely to develop and co-ordinate their resources for
the purposes of the war, but also ’to establish some form of perma-
nent liaison arrangement. ^ One would wish this Conference had
met a few months earlier. Let us hope that this will be a first
stop in the formation of a federal union on a wider basis. Such a
metamorphosis calls for radical changes in soma of the member
countries, but It is well worth making In the intetcsls of freedom.

The civilised world is involved in a revere struggle. Scicnco
has enabled mankind to provide itself abundantly with all the requi-
sites of well-being and if the affairs of the world are wisely regu-
lated. poverty can be blotted out of all countries. Bui mans
perversity has defeated this purpose and the selfishness of nations
Is keeping the world poor and backward. It is high time wo rea-
lized the folly of all this. The present struggle in Europe has al-
ready plunged in misery many countries which were formerly
prosperous. May we hope that a change of heart will soon come
about, that adversity will inculcate virtue and that all peace-loving
countries will band themselves together into a union for the effect-
ive defence of their territories and for the steady progress of their
peoples.

A NEW WORLD ORDER

By

Sir J. C. Cotaji

All great world-wars have been followed by attempts to create
some sort of new world order. Thus, alter the wars of the French
Revolution, the world saw the advent of the Holy Alliance, as well
as of a Quadruple Alliance by which the great powers were to
meet periodically to discuss matters affecting the peace of the
world. After the World War of 1914 a more ambitious attempt
for the establishment of a world order was made, and the declared
aim was to prevent the rise of new political grievances as well as
to remedy economic distress. For obviously the formation of a
world order has a political and economic aspect, and so close is
the intcr-aclion ol these two sides that it is difficult to disentangle
them and their effects. The efficient functioning of the mecluinism
of the world in both these aspects depends upon the recognition
of the Co-operative principle both in the International and national
spheres and on the political as wall as the economic side. The need
of the adoption of tnu principle as the pivot of all political and
economic actions Is to great that we lind aU groat national leaders
of the post war epoch irwn Wilson to Mussolini paying their homage
to it. Looking back from our prtaent position it is strange to find
that only eight year* ago Mussolini laid down the following dictum
as the ideal of the world-policy ol that day: “ What the situation
demands Is the free movement of goods, of services, of people, of
capital and of credit." Briand amongst the representatives of
France and Strcscmann speaking for Germany were not less em-
phatic and eloquent about the importance of having the principle
of Co-operation permeating the sphere of world policy.

Defects of the former World Order.

Unfortunately, the attempt made to create a better world order
after the Treaty of Versailles failed, and it is difficult to say whether
the obstacles proved greater on the political or on the economic
side. On the political side the adverse factors were— the isola-
tionist policy of America, the deficiencies and blunders of Presi-
dent Wilson, as well as the persistence of France in a policy of

A NEW WORLD ORDER

9

humbling and weakening Germany. Not only did Democracy
prove itself unco-operative and revengeful in its hour of triumph
but dogmatic as well; for it struck at the root of the monarchic
principle in Austria and Germany. It forgot that for centuries the
dynastic connection between the Kings o i Europe had given at
least 30X116 semblance of moral and co-operative character to Euro-
pean politics. It thereby opened the way for the rise to power oi
irresponsible dictators who had no traditions to guide and control
them. It was, indeed, in the odd of international policy that
Democracy registered its greatest failures. The promising experi-
ment of the League of Nations was ruined because the constituent
democracies would not see tneir way to give up an iota of national
sovereignty, of national armed strength or of economic nationalism.
The feeble strength of the spirit of Co-operaUon in the League
was mxuulcst when it canw to t h e me oi sanctions ag«iixu»t an ag-

Turning to the econoMic aspect oi affairs we find tluit the post-
war efforts to bring about a new world-order scored few successes,
though they taught excellent lessons in * how not to do it " which
will prove useful when a new experiment in the line comes to bo
launched. After such a great cataclysm as that of the period 1914-
18 u great economic depression was only to be expected, but no
systematic and well-thought out policy was adopted in order to
minimise its effects. Capitalism which was already declining in
vitality and power was progressively controlled and it* liberty was
curtailed; but no important effort was made to reinvigorate it by
introducing economic planning and a conscious and reasoned direc-
tion of economic affairs. Much was said about Rationalisation and
many books were written on the subject but little was done. It
may be true, as Sir William Beveridge has put it, that planning
under Democracy is os difficult as breathing under water. Yet
difficulties arc there to be surmounted. Some countries went as
far as appointing Economic Advisory Councils, but no Important
successes were scored in the sphere of national economic planning.

Indeed, under the unhappy influence of Economic Nationalism
the course adopted by nations was the very opposite of what a
good idea of sound international planning could have dictated.
That great country which was in a position to be the banker of
the world, America, abruptly renounced that function of foreign
investment which was so essential for a proper conduct of produc-
tion and distribution throughout the world. France followed the
example by withdrawing large amounts of her investment abroad.

2

10

JOURNAL OF THE MADRAS UNIVERSITY

As the great creditor countries insisted on raising their tariffs and
in keeping out imports a serious maldistribution of gold resulted.
The example thus set of selfish economic action proved contagious
and economic nationalism soon entered on a course of unwise ex-
cesses. Tariff barriers were raised re cklessl y, national self-suffici-
ency became a wide-spread ideal and a race for depreciation of
currency became the eco n o m i c fashion. In course of time authori-
tarian economics supervened with its repertory of highly doubtful
methods like rationing of imports, fixation of prices and profits and
state guidance or dictation of the course and direction of industry.
In such an atmosphere the last hope o £ general international co-
operation was extinguished with the failure of the World Econo-
mic Conference.

However, the current tendency to place the largest measure
of blame for the present sorry state of world-affairs on the shoulders
of Democracy and Capitalism is to be deprecated. Any just sur-
vey of the world conditions of the day znuht emphasise the im-
mense harm done by the spread of Communism during the post-
War period and by the rise of a totalitarian stale in Russia which
formed the crown, the guide and the inspiration of that movement.
It is impossible to have a totalitarian state in one country without
causing the rise of similar states in neighbouring lands cither by a
process of reaction or by that of invitation or both. Had there
been no Soviet State in Russia there would havo been no Fascist
state in Italy and Nazi State In Germany. Nothing but the rise of
Fascism in Italy could have stayed the flood of Communism in that
country. The Nazis in Germany exaggerated and utilized the
danger from Communism in order to erect in their own country u
state as totalitarian as the one existing in Russia. In fact they
bettered their pattern. The capitalists as well as the middle classes
In the Continental countries were so alarmed by the spread of Com-
munism that they threw themselves on the mercy of the new dicta-
tors. Hence arose an unparalleled concentration of political and
economic powers in the hands of these men. Such a concentration
of powers had repercussions on the whole economic system of a
continent with the result that the banking, the currency and the
tariff policies of countries were used for strange purposes never
dreamed of before. That Capitalism which had been controlled
throughout the whole post-war epoch was now fettered and tied to
the chariots of totalitarian masters. In France too the activities of
the Front Populaire Government completely alienated the capitalist
and bourgeois as well as peasant classes and caused a disruption of

A NEW WORLD ORDER

11

the country both In the economic and political spheres which led to
the Ignominious downfall of the land. Even in Great Britain, the
adoption of the policy of ''appeasement" had for its background
this fear of the growth of Co mmun is m . When Democracy and
Capitalism are blamed for the present world disorder, it is but fair
to recollect that both were paralysed by this Communistic "terror".
Communism might be a noble economic ideal, but it must bear a
very large share of the responsibility for the present disastrous state
of affairs.

The future World Order

In envisaging the new World Order we must face the prelimi-
nary issue whether It will be possible and advisable to retain the
Capitalist Economy as against its rival. State Socialism. No doubt
the present mast exhausting war must put an exhausting and un-
paralleled strain upon the vitality and resources of our Capitalist
Economy. It might also he that countries like Germany, might
when defeated in war throw in their lot with Communist Russia;
that in other countries, too. during war-time the economic func-
tions of the State will be enormously expanded. Nevertheless, in
the long run and for most countries of the world the deciding con-
sideration will be whether the Capitalist Economy utilises the fac-
tors of production inefficiently as compared with the State. We
might adopt the Judgment of such an Impartial observer ns
Mr Keynes on the matter: "I see no reason to suppose that the
existing system seriously misemploys the factors of production which
are In use." Consequently "apart from the necessity of central
controls", a Capitalist Economy will he found preferable to State
Socialism. Still as the process of socialisation will have gone fur-
ther in some countries than in others we shall do well to assume the
existence of a world in which some states are Capitalist whilst others
might be arranged according to the degree or measure in which
their economy is socialised. Similar distinctions and shades of
difference will also be apparent between these states in the matter
of economic planning.

It is obvious that any great war forms by itself a school of
Economic Planning. Planning is after all a question of increase of
central control; and we see how such central control of economic
life been increased at a stroke even in Great Britain. Of course
the lessons learned in war-time are of priceless value when peace
supervenes. No one denies that in case of Democracies the task
of Economic planning is more difficult than in a classless state like

12

JOURNAL OF THE MADRAS UNIVERSITY

Russia. For, in the latter case, all classes except one have been
liquidated; while in the former, a chief task of planning is to lead
to a fruitful co-operation between the various classes. As Prof.
Ohlin has emphasised recently, a system of planning is needed
which “combines flexibility with the possibility of centralized direc-
tion In certain special directions.” We have to avoid that
species of planning which brines under direct public management
the major portions of the spheres of industry and trade and which
will result in the diminution of the viability and flexibility of the
economic system as well os of individual initiative and other dyna-
mic powers of society. Such a system of planning will mitigate
depression* nnd reduce unemployment as well as poverty. Nor
should too much power be vested In bureaucracies under a sound
system of national planning: rather the pivot of planning should
be an Economic General Staff which is "not allowed to do anything
but think about the future and plan for the future.” Too often it is
thought — mistakenly thought — that in economic planning we have
only to follow the example of Russia, with its abrupt changes of
principles and policy of planning, its immense mistakes costing
trillions In money and lives. Its Incessant accusations and punish-
ments of subordinates for sabotage and its privilege of irresponsi-
bility for the man at the head. It is not that sort of planning that
we wont in our new World Order.

There I* another aspect of Economic Planning to which also con-
siderable importance must be attached —the planning of Distribu-
tion. Democracy has been working— von- slowly, It must be con-
fessed— at securing the ideal of economic Justice and of a desirable
distribution of property and Income. What Democracy can do In
the matter of securing such justice is well illustrated by the achieve-
ment of Great Britain in the matter of the extension of social ser-
vices, in that of the extension of Unemployment Insurance nnd
Assistance nnd in that of the heavier taxation of Incomes nnd
Inheritance. The tempo of progress might have been quicker: but
the example of Great Britain shows that “it is possible to arrive at
an economic system which gives security of work and social ser-
vices for all. while giving free play to individual responsibility and
to diversities in initiative and talent” Democracy might well be
proud of the achievement of her eldest child in this sphere. There
is no need to make an absolute equality of income our ideal, for
there is no ground for the belief that such equality makes for maxi-
mum economic advantage. We have, in fixing the just and proper
economic distribution to take account of such factors as the requi-

A NEW WORLD ORDER

13

site supplies of saving for the purposes of war and peace and the
necessity of a constantly expanding system of production.

We may now turn to some aspects of International Co-opera-
tion and planning. Let us take first for consideration the currency
problem. Here a compromise between the points of view of Mone-
tary Nationalism and of a fully unified International Currency
seems to be advisable in the period directly following the present
war. The advantages of an International standard are not to be
denied in the important matters of international trade and inter-
national movements of capital and flows of money. But immediate-
ly after this great war the states will be neither able nor willing to
part with their national monetary systems. This, however, does
not mean the abandonment of co-operation in the sphere of cur-
rency; for it is possible and desirable on various lines, and, indeed,
during the past d>.wad«> several experiments have been made which
show that this is the sphere in which international eo-operntlon has
unusually bright prospects. Thus the success of what ha* been
termed the “Stabilization system" of currency, which was Initiated
in Great Britain but which secured acceptance throughout the re-
gion termed “Sterlingaria." I* at once a sign of the potentialities of
currency Co-opcrntion and the hirh-water-mark of managed
money. By the exrhnnge equalization device cold is confined to Us
true scope of utility as international currency. Hir Three Power
Currency Declaration of 1936 forms another happy precedent and
example of International Co-operation In currency affairs. By it
Britain. France and America agreed not to secure any competitive
advantage by lowering the gold value of thier currencies. A still
more promising experiment was the Monetary Alliance between
Great Britain and Frrnr-’ effected in December 1939 by which the
frnnr-storling rate was stabilised and a clearing agreement was
effected for settlement of transactions between the franc and sterling
groups of countries. What has been practicable in the past will also
bo carried through in future, and a flexible relationship will be
maintained between currencies of different countries each being
allowed in rase of difficulties to alter the external value of its cur-
rency. That does not mean necessarily a system of elaslic parties.
Attention will also no doubt be oaid to th- promising international
development of the Exchange Clearing System which has already
yielded so mnnv advantages and promises even more. It is for-
tunate that the oath of international co-operation in currency affairs
has been, comparatively speaking, so well trodden in the past and
that, in spite of the present great cataclysm, foot-prints have been
left which will guide us in the future.

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JOURNAL OF THE MADRAS UNIVERSITY

Unfortunately, on the side of International Trade and Tariffs
the past shows far fewer examples of that International Coopera-
tion which is so necessary to economic progress. Instead of such
co-operation we have seen during the last decade the advent of
unusually high Protectionism which might be said to have led to the
undoing of the economic integration of the industrial countries.
Moreover even such high tariffs have been declining in importance
compared to novel devices of trade policy— or rather of economic
nationalism — like quotas and exchange restrictions, with the ad-
vent of Fascism the autarchic tendencies of nationalists have been
greatly exaggerated. In this condition of accumulated hindrances
and handicaps we cannot hope for any immediate abolition of tariffs
and other nationalistic forms of restriction but must bo content to
follow the path of gradualism. But even here we are not without a
few earlier precedents to cheer us on our narrow and difficult path.
Uuri wc might remember the tariff truce concluded, if even for a
short period, on the Initiative of Mr. Roosevelt, and the work of the
World Economic Conference of 1933. Here again the intiative must
come from a great creditor country like the United States; for it is
obvious that in the course of the last three decades economic power
and leadership have been passing more and more to America.
Moreover, we have to note the growing importance of “organised
exchange between planned national economic systems". Thus,
while there will be ample scope for national specialization, there
will be great room for planning in/cmafional trade so as to make the
moot of the resources of the world as a whole. In this aspect of
foreign trade there will be a practical and welcome supersession of
tariffs and other restrictions and hindrances to trade.

But there are other important lines of International co-opera-
tion which must claim a place even in a brief summary- of that topic.
There is, for instance, the thorny and difficult subject of the just
and proper international distribution of rare materials. Any ade-
quate solution of this problem would need a rationalization of the
production as well as distribution of such raw materials under in-
ternational agreement. It would be necessary to emphasise that
facilities should be given to any country to provide itself with raw
materials only so far as to meet its demands in peace time. No
facilities should be given to any country to lay in supplies for future
wars. Nor would that be the only condition precedent to be observ-
ed by any country seeking to take advantage of such a scheme of
rationalization under impartial international control. It will also
have to lower its tariff barriers and to reduce any restrictions that

A NEW WORLD ORDER

15

it might have imposed upon international trade pari passu with
such reductions in other countries. Even before international co-
operation on such a scale can be inaugurated much useful work can
be done by way of mere hilatcral agreements. As Sir Arthur
Salter and others have suggested, the British Government might
agree to supply Germany with the raw materials wanted by tho
latter in exchange for goods produced in Germany on a ratio of
exchanges determined by average prices over a sufficiently long
period. But, while such bi-lateral agreements form a good intro-
duction, our ultimate aim should be a state of things in which the
production and distribution of raw materials in colonies should
form a responsibility of the whole world acting on co-operative
lines.

Turning our eyes to the politico! aspect of the future u-orld
order, we find there too a vast field for the application of tho prin-
ciple of co-operation. For, we shall have to consider how Demo-
cracy can rise superior to its own post and tackle the great tasks
lying before it. Fortunately, co-operation is of the very essence of
Democracy, and, Indeed. Democracy is best defined as government
by co-operation. Democracy has yet to learn how to select its
leaders aright and to form o body of elite, to combine the merits of
aristocracy und democracy. Such a body of elite is not to be con-
stituted. as under other aystems, by a group of self-styled super-
men. Rather It is to be made up of the leaders of voluntary associa-
tions working together to solve ths problems of democratic gov-
ernment. Democracy has also to secure the right inter-relation,
co-operation and organization of political parties, to prevent the
too great predominance of any particular interest or parly and of
party organization. Democracy has also to learn how to deal with tho
problem of minorities. Too often and in too many countries have
majorities discarded the method of co-operation in our own age
and have tampered and interfered with the spiritual, educational,
and political rights of minorities. The world has a great deal to
learn in these respects as well as in the way of forming a system of
education suited to Democracy. Above all. Democracy has to learn
how to master national sovereignty and has to acquire the art of
giving up some of the extreme features and aspects of national
sovereignty in the interests of international co-operation. For, in a
word. Democracy has to be international and as wide as the world
if it is to be permanent. That is the greatest problem of our day;
and, if it is not solved, our Democracy will share the fate of that
Greek democracy which bloomed two thousand years ago.

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JOURNAL OF THE MADRAS UNIVERSITY

Grounds /or hope and optimism.

Having enumerated so far the requisite* oi a new world order
we mi gilt pau*e to see whether there arc any signs ol the times
which are favourable to the iorma.ton ol such an order m the near
future. It is well that, by general admission, a European federa-
tion— perhaps even tnc federation a i the World— stands In the lore-
front ol our war aims. That is certainly a great prospect at once
of an economic and political character. Hut an ounce of fact is
better than a pound ol theorising and wo would lain know ol any
change ol heart in tuuons and a m o n g their leading statesmen tu
this direction, f ortunately, Ihc dire necessity to which nations
iuivc been reduced by this great war nas proved an excellent in-
structor, and the tide seems to have at long last turned decisively
in th& direction of international co-operation At once political and
economic, 'ihus it was a magnlticcnt gesture on the part of
Mr. Churchill when he proposed in June last, a permanent union
between the British Empire and the French Republic and u pooling
of their political and economic power*. 'Unit gesture lias been fol-
lowed by another and a more lortunalc ooo— the ahunng ol naval
and aerial bases, both in the Atlantic and the Pacific Oocan*—
between Great Britain and the United Slate*. Add to these tho
gifts ol destroyers by America and arrangements lor common
defence between that great country and Canada (or rather Great
Britain). These policies constitute great lessons in the art of Inter-
national co-operation between Democratic contries os well as in
that of mastering international sovereignty. Compared to co-opera-
tion in these matters that on the economic side is far easier; and
already both Mr. Roosevelt and Mr. Wendell Wilkie have strongly
advocated the policy- of "generous aid to the limit of prudence and
effectiveness to Great Britain" and have deplored "the loneliness
of the United States which was the result of the foreign policies of
the last eight years." Here then, we are witnessing the formation of
a great nucleus of the future great federation. As each conquered
nation of Europe is liberated by the joint eflorts thus contemplated,
it will automatically join the new federation. Each such country
will then be also in the right mood to join in the common economic
and political policy of the federation and also to part with some of its
national sovereignty. It is very probable that it is on these lines
that we shall see the rise of a great world federation and the solu-
tion of the age-long problem of international co-operation in its poli-
tical and economic aspects. Wc shall then learn to give a new
meaning to the poet’s dictum.

“Thus on the flaming forge of life

Our fortunes must be wrought"

WORLD ECONOMY OF THE FUTURE

By

Prop. V. G. Kale
Poona.

The present war has demonstrated the powerful influence which
is exerted by the political, racial or social ideals of peoples on
internal and external relations of nations in the economic sphere.
During recent years the national or international equilibrium In
trade and industry, in fact, in the daily lives of peoples, has been
utterly destroyed. In certain countries, citizens have been deprived
of their birth-right of individual freedom and they are dragooned
by political cliques. Thus the very foundations of normal economic
life have been dug up there and attempts are being made to create
an altogether new national and world order. The substitution of
autocracy and autarchy for popular liberty and freedom of com-
petition, is intelligible as being inevitable and essential in times of
war. What is however, peculiar to the pre«nt war is that years
before its outbreak, what economists are wont to characterise as
abnormal, had been systematically made the normal mode of life
in internal and external relations by powerful nations on the Euro-
pean continent Policies of States were dominated by idculs which
were incapable of realisation by methods compatible with sound
economical practice and reasoning. The period of war and a few
years of the after-war period are usually regarded by economists
as abnormal. But in the present instance. Russia. Germany, Italy
and to a certain extent. Japan, had made the pre-war years os
abnormal as the war period All economic activities were regu-
lated and controlled with a view to the attainment of a certain
goal set before the people by their rulers. Economic considera-
tions wore subordinated to social, racial and political ideals, and
individual freedom which within reasonable limits is essential for
the smooth and beneficent working of economic life, was denied.
Hobson’s choice given to the people of Germany by their masters,
between butter and guns is typical of this extraordinary state of
affairs. The dictators have thus vastly unproved on the ideals and
methods of Mcrcantalists of the past.

Today’s dictators of Europe have destroyed the freedom of the
neighbouring nations by force and have sought to impose on them
3

18 JOURNAL OF THE MADRAS UNIVERSITY

their political yoke and economic slavery. They aspire to esta-
blish peace In Europe on the basis of this domination which they call
“ a new world order ’’ and have threatened to confer the blessings
of the latter on Africa and the near East Japan has joined them
and has declared its ambition to achieve in Asia what the Euro-
pean dictators have been doing in the West What is the new
“ world order " which the Axis powers propose to establish for tho
good of mankind ? Under that order, it seems to be presumed, the
" superior " world states will deal with other and inferior nations
as vassals. The latter will be defended by the leading States and
their trade and industries will be regulated and controlled in the
supposed Interest of all. Peace will then reign in the whole world
and under the protection and guardia n ship of the dominating
powers the well-being of humanity will be safely and soundly pro-
moted. The natural resources and the markets of the south will
be controlled and distributed according to what the protecting
angels regard as equitable and economic standards. If the actions
and the declarations of dictators are any guide, such appears in
substance, to be the conception of the world economy of the future
formed by the ruling parties in Germany, Italy and perhaps also in
Japan.

The very idea of such a world order resting upon brutal con-
quest and barbarous domination b repugnant to the mind and the
spirit of every civilised person. The first task of all people who
value individual liberty and national freedom lies, therefore, in
proventing and destroying world domination that is now being
attempted. A world economy that is expected to be beneficial to
humanity, must be based on international co-operation and har-
mony. Individuals and States must be free to live their own lives
without interference from outside and ihis freedom will be restric-
ted only by common consent and general agreement. In a national
economy effort is made to harmonise individual and common good.
National good and the good of mankind have to be similarly recon-
ciled by agreement. It is the failure to bring about such a harmony
that has been responsible for internal conflicts within States and
wars between nations. Mussolini's conception of aggressive war
being an essential instrument of national progress and the Nazi
theory of racial superiority arc antagonistic to ordered, peaceful
and happy human existence. Whatever excuses the dictators may
put forward for their aggression and brutality, a world order can,
not conceivably be based upon their principles.

World economy cannot be divorced from world politics. In
fact, it is intimately bound up with international political relations.

WORLD ECONOMY OF THE FUTURE

19

With the march of modern material civilisation, nations have in-
creasingly recognised the significance and the value of mutual
understandings and common institutions as conducive to the gene-
ral well-being of mankind. The post, the cable, sea transport, trade
agreements, exchange of commodities, international banking are
devices which have been employed to knit together the different
constituents of world economy. In national economies the national
States regulate these matters so far as regulation is necessary. In
world economy, mutual agreement is the connecting link and com-
mon benefit Is the motive. Thinkers of the liberal school believed
that in the international as well as the national economic sphere,
activities inspired by the individual economic motive ond unham-
pered by State regulation, made for the well-being of all. This
was a reaction against the Mercantilist system in which States
dictated to their people the channels through which trade must pass
and the manner in which agriculture and industries should be deve-
loped. It was believed that the abandonment of this policy and the
adoption of laiast: /aire, would, by the removal of restrictions on
Individual initiative and freedom. lead to better exploitation of the
national resources of the world, to an increase in the efficiency and
productive capacity of labour and capital and to greater and more
rapid progress of mankind. These results were, however, only
partially achieved. With the extension of its territories and the
expansion of its markets and sources of raw materials England did
increase its productive capacity and wealth: and this growth of
prosperity could be attributed to individual initiative, daring and
organising power which made the most of improved machinery pnd
every other means of making profit. British economy, however,
suffered from lack of equilibrium within and other constituents of
world economy soon began to feel that they had been left lagging
behind in the race for economic prosperity. Germany, the U.S.A.
and other countries thought that they had no use for a fait res fairc
policy which was wholly unsuited to their peculiar conditions and
that Government patronage and regulation were essential for the
development of their industries and trade. This new attitude was
supported by a school of economists on a modified theory of inter-
national trade and of the relation of the State to the nation's econo-
mic life.

World economy consisted, before the last Great War. of national
economics pursuing varied policies regarding economic develop-
ment, differing in kind and degree as regards State intervention In
matters affecting industry and trade. A working understanding
existed between nations as to currency, exchange and commercial

20

JOURNAL OF THE MADRAS UNIVERSITY

policy in spite of protective tariffs and fiscal disputes. A kind of
a balance of power and economic equilibrium supported world
economy. The stability of the balance was, however, frequently
threatened by tho political ambition of certain nations and the
discontent of others with their position in world economy. The
Great War caused enormous destruction of life, properly and
wealth. National and international debts were piled high.
While the productive capacity of certain industries increased, the
power of consumption of peoples declined, channels of trade were
changed and sources of raw materials and markets for finished
goods were disturbed, currencies and exchanges were in confusion
and a severe slump succeeded a boom. The wounds left on the
body of world economy by the Great War took long to heal and
in the course of the cure, the economy underwent a radical change.

In Europe, there was, after the War. great activity in the re-
arrangement of national boundaries. New States were created
and old ones wero reconstructed. Old markets and sources of raw
materials were split up and joined together without regard to eco-
nomic consequences. Repayment of international debts created
difficult problems and trade and international exchanges were
thrown out of order. It took years for the world to settle down
in this altered political and economic conditions and for a new
world equilibrium to be established. Nations tried somehow or
other to adjust themselves to the altered conditions. Tho League
of Nations and the International Labour Office which had been
act up to watch and guide the international system emerging from
tho peace, put forth continuous efforts to facilitate
tho change over and the establishment of stable
political and economic relations. The preservation of the
independence of small nations and of democracy was the basis of
the new world order. But Germany was chafing under the new
arrangements and nursing revenge and Russia soon broke away
from them. The Nazi policy in Germany decided to upset the
world order which emerged from the peace treaty and began its
preparations for attaining this object. It meant the reorganisation of
Germany’s national economy and a radical change in its external
economic relations. Italy followed its neighbour’s example. The ideal
of economic self-sufficiency, adopted by these two nations and the
systematic efforts made by them for its success could not but ad-
versely affect the structure of world economy which had already
to face the efforts of the political end economic revolution in Rus-
sia. The League of Nations proved unequal to the task of defend-
ing the world order which it had been created to safeguard. It

WORLD ECONOMY OF THE FUTURE

21

could not likewise bring about adjustments in that order which
experience and general feeling had shown to be necessary. World
economy became unbalanced owing to the defection of Germany,
Italy and Japan whose policies of aggression became a serious dis-
turbing factor.

This was the state of affairs when the present war began.
Before the task of reconstruction can be thought of, the disturbers
of world peace have, of course, to be first defeated and the kind of
order they want to impose on the world has to be prevented. The
terrible ravages of the war will have to be repaired and the work
of reorganising world order and world economy will have to be
taken in hand. This will be one of the most difficult of tasks for
nil peoples of good will to perform. The war effort Itself will have
given n new turn to trade and industries. Exigencies of war have
already made It imperatively necessary to establish and to expand
certain industries, the future of which will have to be safeguarded.
India’s resources In raw materials and man power arc being deve-
loped so that they may effectively contribute to common victory.
Germany has already been manlpuloting the resources of conquered
and occupied countries to Its own advantage. It la certain that the
people of these territories are longing for the restoration of econo-
mic as well as political freedom and this will have to be guaranteed
to them. The British Commonwealth of nations and the U S A. will
have to take the lend in constituting a sort of a world-federation of
which free notions will be members and whose mutual economic
relations will be inspired by common interest and regulated by
common consent It will be a tremendously difficult job to distri-
bute productive power, industries and trade among the members
of a world federation so ns to give equal opportunities to all and
to promote the well-being of every nation and race. If nil the
enormous losses, hardships and misery which the present war will
have entailed, will not reconcile peoples of the earth to the Idea
of a world federation, all hope for the future of humanity must be
abandoned. A world state may be a Utopia but a world economy
reconstructed on the principles of equality and justice for all. will
have to be accepted as a sheer necessity. Nations of the East as
well as of the West will have a vital part to play in this world
organisation and there b no reason why it should not succeed.
There is at least no reason why an honest and earnest effort should
not be made in that direction. The weak points in the organisa-
tion of the League of Nations arc now patent and we can learn a
great deal from the experience of its working.

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JOURNAL OF THE MADRAS UNIVERSITY

It will be futile to try to work out the future world economy
In any detail. It is sufficient to realise what its general lines and
underlying principles will be. The experience of the period be-
tween the peace treaty at the close of the Great War and the out-
break of the present war will be a useful guide. It will have to
bo reinforced with our knowledge of the economic developments
that will have taken place in the course of the present struggle.
Account will also have to be taken of the recent happenings in
Africa and Asia, the needs and aspirations of the nations and
peoples of these continents, and in the light of these, of the basic
requirements of the future world economy.

INTERNATIONAL MONETARY RELATIONS

By

V. L D'Socza

Professor of Economics, Mysore University.

Economic or te chno logical changes are forcing mankind in iho
direction of world-wide integration and interdependence but poli-
tical tendencies strongly resist that trend. Technology makes for
easier, larger and more rapid movement of goods, capital, labour
and ideas across ironticrs but politics constantly erects walls that
restrict all these movements. Peoples of the world work at cross
purposes and political nauonabsm refuses to adjust itself to the
internationalism created by scientific advance and technical devices.
A conflict rages between world economics and political units and
there will be no stabdity till these forces have been accommodated
to each other. After nearly a century of astounding discoveries
and inventions which have multiplied tho power of producing wealth
almost at the will of man we still find ourselves In the same plight
as the one described by Friedrich List, the difference being that
what was then true of Germany is now true of the whole world.
He soya, " Thirty-eight customs boundaries in Germany cripple
commerce as if each limb of a man's body were bound ao that tho
blood could not flow over into another. To trade from Hamburg
to Austria or from Berlin to Switzerland you must go through ten
states and pay ten transit duties." In those days nationalism was
a movement towards unity but to-day it lias become in large part
o movement for disunity and a clog in the progress of technology
and economics which have by far transcended national limits. Poli-
tical nationalism has Balkanued the whole world while economic
technology has made of it a unified whole.

The tendency of technology is to expand the volume of inter-
national trade transactions while the tendency of politics is to
contract that volume and live within the narrow confines of a
nation. Barriers to economic intercourse constitute a major cause
of wars, for they diminish economic opportunity of enterprising
nations and give rise to fighting slogans such as "population pres-
sure, access to raw materials, spheres of influence, and economic

24

JOURNAL OF THE MADRAS UNIVERSITY

imperialism.” The Erst condition of political peace as well as econo-
mic welfare is to les son the ec onom ic significance of political boun-
daries.

The structure of economy in future will be characterized by a
mixed system, n a me ly the principle oi lroc enterprise, and tlic
principle of conscious control will function side by side. The mix-
ture ot these two principles will be ditferent m different countries
and it will range all the way from liberal to pla nne d economics.
It is a problem o£ the first m ag n itude to work out methods lor
mutually beneficent relations between econo m ic systems of diver-
gent types aud to switch on national politics trom power economy
to welfare economy.

We arc at present concerned only with one aspect of inter-
national co-operation, namely how to secure monetary stability,
how to counteract the business cycle, how to create the conditions
under which a steady ccouo.iuc expansion can take place, and how
to reconcile internal stability of the domestic prices with the exter-
nal stability of one country's currency m terms oi lureign
currencies.

We have to determine the respective roles of Iot*Mz-/air« and
planning in the sphere at international monetary relations. As in
other spheres wc have to dcude wnat should be left to the work-
ing of the automauc market forces aud what should be subjected
to conscious public control*

'1 he primary task of the monetary system is to aid in the ex-
change of goods. ’1 he smooth functioning of the currency and
credit system is an indispensable condition of international trading.
On the behaviour of the money mechanism depends so much of
those inflations and deflations, booms and depressions which make
peaceful adjustments well nigh impossible.

We must first of all clear the deck for action and jettison a
great many die-hard notions. The first is the tradition of an auto-
matic self-regulating gold standard which under modem condi-
tions has lost nearly ail its mcr.ts. The idea of money* linked to
gold may be given up and we may move on to the position where
the total amount of money supply and the ratio of one national
currency unit to another are matters of conscious management. In
the second place we need a psychic revolution whereby panics which
are easy to start and hard to stop could be eliminated. The inter-
national movement of funds should be in response to trade require-

INTERNATIONAL MONETARY RELATIONS

25

menls and not as a result of fear. In place of " hot money " and
“floating balances” there should be healthy foreign lending. In
the third place various instruments o 1 monetary management have
been devised or discovered such as manipulation of the bank rale,
open market operations, devaluation, sterilization of unwanted gold
funds, changes in the reserve ratios of banks, exchange equalization
funds and public works policy but these are operated by national
governments each in its own interest and frequently at cross pur-
poses with others. These instruments should be wielded by un
international body or by an association of national banking systems.
Some experiments in monetary internationiism have been made
already c.g. tho sterling bloc, the tripartite agreement between Great
Britain, France and U.S.A. and the Bank for International Settle-
ment. Concerted action along these lines should be further deve-
loped.

It is not possible for any country to insulate itself against world
currents. No country acting alone can secure full employment of its
productive resource*. The wurid economic depression of the nineteen
thirties was met by each country following it* own policy of beg-
gur-my-nctghbour with the result that the crisis deepened und
ussumed disastrous proportion*. Economic wisdom lay in the direc-
tion of co-operaliw uflorts to arrest the downward sweep of defla-
tion. Monetary nationalism has been the bane of a stricken ar.d
divided world and in place at international agreement for the good
of all we have had competitive depreciation, mounting trade
barriers, exchange controls and autarchy. We do not wish to con-
vey that monetary policy alone can keep our economic system in
smooth running order but that it will go a long way in achieving
world stability and ordered development.

The world having become a single economic unit we have to
move more and more towards international control and inter-region-
al co-operation. In the monetary sphere we must devise an
International Authority which will undertake the responsibility of
regulating monetary relations between the Member States. The
obvious suggestion is that they should adopt a common interna-
tional currency.

An international currency may take various forms.

(1) A number of countries may agree to adopt a gold standard
and the same monetary unit of account. They will co-operate in
minting coins of the same gold value and with the same name as
distinguished from the orthodox gold standard which operates
4

2fi JOURNAL OF THE MADRAS UNIVERSITY

through the free coinage of gold into national coins such as the
gold sovereign or the gold dollar. In no fundamental respect will
the international cuirency differ from the old system based on the
free minting of national coins except the convenience of having
the same monetary unit of account for all countries under consi-
deration.

A further development of the same system in consonance with
modem banking practice would be that each Central Bank would
issue notes of the same designation and the same gold value. Tito
countries would be using the same monetary unit and the Central
Bank of each country- would be under the legal obligation to buy
and sell gold at a fixed price in terms of its note issue.

(2) A number of countries might agree to set up an inter-
national Bank charged with the sole right of note issue. These
notes will form the only legal tender currency and they may or may
not be backed by a reserve of gold. In each country there will bo
a Central Bank fulfilling all the functions of a central institution
except the right of issuing notes. For example the Central Bank
will have the power of raising or lowering the money rale at which
it is willing to grant credits and also the power of expanding or
contracting the quantity of deposit money through open-market
operations. The credit supply put out by the Central Bunk will
be regulated by the necessity to keep a sufficient reserve of the
notes— the international Bank notes to meet the demands made by
commercial fof thc&c notes.

The principal merit of this system is that the total monetary
supplies of the countries in question will depend not upon the acci-
dental circumstances of gokl mining and the demand for gold for
monetary as well as non-monetary purposes but upon the trade
demand for the circulating media. The international currency is
well adapted as an instrument for adjusting the balance of pay-
ments among the Member Slates. If, for example, one particular
country shows an excess of imports over exports, the excess will
be paid oil by* a shipment of notes. In consequence there will be a
reduction in the supply of money which will cause a fall in in-
comes, prices and costs and conversely a rise in the countries re-
ceiving the exported currency notes. These movements will check
the initial excess of imports on the one side and the excess of
exports on the other till equilibrium is restored and the surplus of
payments over receipts in the trade balance disappears. For a time
the Central Bank may offset the loss of its note reserves by ex-

INTERNATIONAL MONETARY RELATIONS 27

panding the internal supply of deposit money but sooner or later
the continued export of monetary reserves will threaten the sta-
bility of the Central Bank and it will be obliged to restrict credit
and deflate incomes and prices and thus ensure the convertibility
of its deposits into the international currency.

Yet another advantage over the system of independent nation-
al currencies is that the rate of exchange is a fixed known quantity.
There is no fear of frequent fluctuations and international trade will
be relieved of the haunting fear of unstable exchanges and the flight
of capital from a currency which is expected to depreciate to
one which is reckoned to be sound thus causing disturbance to both.

Will an international system baited upon, let us assume, free
trade and a common currency remove the menace of trade de-
pression ? The answer b that these two criteria alone will not
Immunize our system against periodic booms and depressions, for
during the nineteenth century trade fluctuations occurred despite
an international gold standard and fairly liberal conditions In
world trade. In order to exercise adequate control over trade con-
ditions and prevent Industrial fluctuations the International Cur-
rency Authority must have the ultimate power of regulating the
total supply of money within the Member States. Whenever a
trade depression tends to develop itself it could expand the issue
of notes and increase the monetary reserves of the various national
banking systems. It could thus correct the manifestations of the
oncoming depression e.g. reduction In prices, costa, incomes and
money expenditures. Conversely at the onset of a boom It could
restrict the total supply of money and thus hold in check an infla-
tionary movement showing itself in a ri«* of prices and incomes.

It Is however doubtful how far the control over supplies of
currency can be made effective. For one thing the Central Banks
while receiving the additional supplies might take steps to sterilize
the new currency and prevent it from fulfilling Its function of
monetary expansion. Secondly, even if the International Bank
could exercise effective control over the total money supplies in
the Member States there Is the additional difficulty to be encoun-
tered. namely that business enterprise might be unwilling to use
(he additional funds. These funds are intended to arrest the down-
ward movement of profits and prices and if private enterprise will
not react to cheap money and plentiful money the depression will
have its own way. In such a circumstance each state under the
direction of the International Authority should make use of the
idle funds for public works until private enterprise once again gets

a move on.

28

JOURNAL OF THE MADRAS UNIVERSITY

In a dynamic world there is constant need of machinery for
re-adjusting a disequilibrium in the balance of international pay-
ments. Apart from a general trade depression, the disequilibrium
may be caused by several forces such for example as that country
A producing rice for export and country B producing wheat for ex-
port may discover a marked tendency for the substitution of wheat
for rice. Country A will be faced with an excess of payments over
receipts, causing it to lose monetary reserves and Country B will be
in a contrary situation. To correct the excess in each case the
proper remedy would be, leaving aside the device of import res-
trictions. a monetary deflation of incomes, prices and costs In A or
a monetary inflation in B. Deflation of prices will lead to a re-
duction of profit margins and so to unemployment but the extent
of the damage and the quickness of the recovery will depend upon
the flexibility of costs such as wage rates moving downwards with
the falling prices. The efficient working of the International Cur-
rency system depends upon the resilience of the costs In the Mem-
ber States. But national planning of prices and costs produce con-
siderable rigidities which prevent an cosy adjustment to new condi-
tions. For exnmple the railway fares, the rotes for gas, electricity
and water, the school fees, rents, insurance premiums, and the
prices fixed by Industrial cartels and agricultural control schemes
are all in the nature of long-term contracts and a general deflation
of money incomes and money expenditures would lead to a con-
siderablo decline of production and employment while prices and
costs would painfully and sluggishly adjxist themselves to the de-
flated level. If the fundamental condition ct flexibility is not satis-
fied— In the planned systems rigidity b a marked feature— then the
necessary readjustment between the countries must be made by
variations in the rate of exchange.

Free trade or freer trade will assist the process of reestablish-
ing equilibrium. It is easy to stimulate exports as a corrective of
a country’s trade position in the absence of tariffs and various
restrictive measures. Free trade will reduce the extent of the
period of deflation as the exports will be stimulated under the two-
fold impulse of no restrictions and lowered prices. Hence a gene-
ral lowering of trade restrictions will greatly aid the successful
working of the international currency.

WORLD ECONOMY AFTER THE WAR

By

P. S. L© KAN A THAN
University of Madras.

I

For well nigh three quarters of a century before the last Great
War the Western World had developed something like an inter-
national economic order in which the main ingredients wore rela-
tive freedom of trade, of capital and of labour. That economy was
based internally upon what may broidly be termed as capitalism,
in which the mainspring of all industrial and agricultural life was
the motive of profit, subject to a limited sphere of economic activity
on the part of the State. In its external aspect it may be described
as economic liberalism in which people believed In the efficacy of
International specialisation of functions and exchange and in raising
their material welfare by freedom of trade and commerce. Such
an economy was greatly strengthened by a world monetary system
which, originally bused upon bimetallism and later upon gold, func-
tioned smoothly. Th-* international gold standard brought ubout a
fundamental unity in the price and income structure in the vari-
ous countries which had adopted it. for with fixed exchanges be-
tween the currencies of various countries, it not only ensured a
smooth flow of goods and facilitated free and safe movements of
capital but also unified the industrial structure of countries all of
which were more or less similarly affected by the same set of
monetary and economic factors.

Such a system did work fairly satisfactorily for a considerable
time. What is even more important, nations came to believe that
on the whole it was the best system conceivable and that it stood
for great and rapid economic progress. It was the logical culmina-
tion of the operation of those germinal ideas of freedom of competi-
tion. self-interest and laisse: fair*. which exerted such a strong
and powerful influence in the 19th century.

Not that these forces of competition and fairs cr faire operated
at any time undisturbed. Freedom of competition was found, in
practice, to be greatly limited by the serious Inroad of monopoly
into economic life. Combinations and other associations of indus-
trial units greatly modified the pristine purity of free competition.

30

JOURNAL OF THE MADRAS UNIVERSITY

Nor was the State that passive instrument which the lai&sez foire
doctrinaires would make of St Governments began to control
certain spheres of economic activity and to interfere in other direc-
tions. Further certain rigidities partly brought about by the State
and partly by the action of organisations of workers had crept into
the system which increasingly damaged the resilience of the eco-
nomic system and its adaptability. So that the world of free com-
petition and economic liberalism was not the world contemplated
by Adam Smith and Mill, nor was the role Of government that
assigned to it by Bentham.

But despite all the above modifications, the picture of the
Western World as a unified economic unit broadly remnined true.
The achievements of such an economy were, if not spectacular, un-
doubtedly great. It saw a vast and rapid Increase in national
wealth. It brought about a great increase in population. New
regions were conquered and resources exploited. 'Hie growing
population of the world was fed on an increasing scale of living,
never before equalled in the history of mankind.

Unfortunately, however, this bright picture of world economy
had its own dark patch. Side by side with the division of the world
Into national states, capitalism brought about o new division, the
world of the rich and the world of the poor— the haves and the
have-nots. The grave inequality in the incomes of the people
within each country, whether it may be Justified or not nnd whether
It should be regarded as an inevitable and necessary accompani-
ment of capitalism or only an incident which may be done with,
remained a festering sore. Secondly, its claim that however de-
fective it may have been in the sphere of distribution, it always
ensured a continuous increase in the stream of production could
not he sustained in the face of the ever- recurrent crises and depres-
sions which it could do nothing to avert. Millions of people are
thrown into the dust-heap for no fault of theirs, and an economy
which can function only on the basis of these periodical hold-ups
and breakdowns cannot be considered to be even reasonably effi-
cient. But even more important than the above is the fact that
the trade cycle has broken up the economic unity of the world,
which constituted its main claim to merit. The economic world
has now been cut up Into bits. There is no international mone-
tary system based upon a common monetary standard. Prices and
incomes do not move and are not allowed to move in unison.
Trade and commerce arc no longer free. Each country is seeking
to raise a mountain-high level of tariffs and to impose other forms

WORLD ECONOMY AFTER THE WAR 31

of barrier to the free movements of goods . Capital no longer seeks
the regions of profitable investment; and refugee funds move from
one centre to another in desperate search of the will-o-’the wisp
of security. The free flow of labour from one country to another,
i.e., migration, has been also arrested, thanks to the policies pur-
sued by the U.S.A., Australia and other countries. To-day there
is no world economic order, even if one confines his attention to
the Western world.

Again, as Dr. Thomas has rightly pointed out, in all this
material and industrial advance, the East has had to play the role
of a Cinderella. Colonies have been exploited, not in the inte-
rests of the peoples living therein, but to the benefit of the Western
nations. Such an unjust order of things contains within itself
the roots of destruction.

Finally, the world economic order despite all its conscious and
unconscious efforts was unable to check the aggressiveness und
cupidity of capitalists in their exploitation of resources and search
for markets. Want have been brought about partly by economic
factors, and some wars at least have been the result of predatory
capitalism. In their anxiety to make profits, however dubious
the methods may be, capitalists have not infrequently thrown in
the full weight of their economic power for development of the
armament industry— thus directly promoting the chances of war.

□

The world can no longer afford to have two such wars on a
major scale within the short span of 25 years. Between these
wars and the trade cycles, the old kind of capitalism is doomed.
There is no chance of capitalism emerging unscathed after this
war. It has played itself out. The instruments of control which
the war has evolved are not likely to be thrown into the scrap-
heap, but will remain as more or less permanent methods of con-
trol. What should be the nature of the economic order within
each country after the war, and what should be or would be the
nature of on international order are questions the answers to
which are bound to be extremely uncertain. Much will depend
upon the ideas that now dominate the peoples of the world and at
the time when peace terms are settled.

Within each country the nature of the internal economic
system that will emerge after this Armageddon will depend upon
the respective ideologies prevalent in diSerent countries. It is,

32

JOURNAL OF THE MADRAS UNIVERSITY

however, safe to state that no single uniform pattern of economic
organisation will be adopted by all countries and that differences
in economic structure and organisation are inevitable. There arc,
of course, various possibilities. In the first place, there is the
possibility of an extension in the sphere of state ownership and
management of enterprise, not as a mere compromise between
capitalism and socialism, but as a deliberate and conscious effort
to get the best out of both private enterprise and Initiative on the
one hand and of public management on the other. In the happy
language of Sir A. Salter, the new organisation should be based
on “selective compromise,” and seek to retain the best features
of both.

The second type of development is the extension ol the sphere
of co-operative organisation. The British Consumers’ Movement
has developed vast trading activities and e l i m i n ated the profiteer.
But the forces of capitalism have combined with certain c lasses
of producers to arrest its onward march. Consumers’ organisa-
tions have now to fight not merely the monopolist manufacturers,
the cartels and combines, but also agricultural marketing boards.
Surely in view of the superior moral foundation of the co-opcra-
tlvcs, a new uttitude to their growth and development is called
for. The co-opcrativc movement is directed towards organising
industry on the basts of mutuality — All for Each and Each for All
— and there can bo no conflict of interests between the producer
and the consumer, because the gains of production accrue to the
consumer. Great Britain. Sweden. Finland are countries where
productive organisation directed by and in the interest of the con-
sumers has reached a high stage of development. In other
countries like Holland, Denmark, Belgium, Switzerland, etc., agri-
cultural co-operation has done no less service to the ryots; and
the bulk of production and marketing is in the hands of co-opcratlvcs
which have ensured a fair deal to all. In the future organisation
of industry and agriculture therefore co-operation may be expec-
ted to play a large part. It should supplant private capitalism,
and should function alongside of national, local and other semi-
public organisations controlling spheres of economic activity which
cannot readily come within the range of co-operative activity. In
any case the whole economic life of a country must be permeated
by the co-operative spirit. No industry should be allowed to
carry on unless its profits go to the community as a whole and are
prevented from enriching the pockets of particular sections of the
community •

WORLD ECONOMY AFTER THE WAR

33

But these by no means exhaust the possible lines of develop-
ment. There is the totalitarian form of economic organisation
which has taken in recent years two forms, the Fascist and the
Nazi forms and the Soviet-socialism of Russia. There are those
who find nothing to choose between these two. But it seems to
the present writer a clear mistake not to be able to distinguish
between the two. With all its shortcomings, the communism of
Russia has been Inspired by the desire to e l i m i n ate poverty and
to ensure economic equality. Nazism and Fascism despite all their
achievements stand for the overthrow of democracy and for the
over-glorification of the State as against the people. The people’s
welfare is but an incident in the march of the car of Juggernaut .

But what is going to happen m the future after this war
ends ? Can we be sure that the organization of the

Italian and German variety will disappear and that of
the Russian type be considerably modified so as to ensure
greater freedom to the common man ? We cannot toll .
But It is open to us to suggest that socialism of a more democratic
type than has been evolved so far is not only practicable but is
likely to bo established in sonic countries. The reasons for this
view arc several. Only one or two need be put down here. We
have not yet discovered a way to do away with vast accumulation
of wealth in the hands of individuals by the pedestrian methods
of income and death duties. Indeed, the distribution of wealth
and income has been more, and not less uneven after these taxes
have been imposed than before. Secondly, the elimination of the
problem of unemployment and the combating of the slump can
only be achieved by a more direct action on the part of the States.
Hence it may be expected that some countries at least will embark
upon socialism in which all the instruments of production will
be entirely owned and controlled by the Slate and that no one
will be allowed to work for an employer other Than the State .

m

We shall thus have different types of economic organisation
functioning at different levels. But if we arc not to revert to
barbarism, but restore civilization back to humanity, wc cannot
afford to give free rein to the forces of selfish nationalism and
aggrandisement which have marked the activities of a number of
States in recent times. National differences of organisation may be
permitted up to a point ; but these differences should stop short of
exploiting or injuring the peoples of other countries. From this
point of view it is doubtful whether there can be any hope for the

34

JOURNAL OF THE MADRAS UNIVERSITY

world if the ideas that now permeate the States in Germany and
in Italy are allowed lo exert an> influence after the war. There
arc some who hold that a world order can be built out of very
divergent and conflicting economic ideologies. Mr. Meade for
instance in his very interesting book entitled The Economic Basis
oj a Durable Peace pleads for a place in his proposed new inter-
national organisation for all kinds of rival economic systems. But
surely there can be little common ground between Nazi economic
system and an international economic system, for each is based
on entirely different and opposite economic principles. We should
therefore draw the line at the Nazi or Fascist economic systems,
unless they are prepared to shed their militant and aggressive
nationalist spirit and willing to co-operate in the evolution of a
new economic order.

The New Economic Order must be based upon a frank accep-
tance of a new scale of values in which no group can be allowed
to march by pushing back olb«r groups. The wellarc of any nation
cannot be at the expense of that of other nations. This needs
particular stress because too often in the past the economic pro-
gress of certain Western countries has been at the expense of the
loss advanced countries.

On the basis of this new principle of co-opc ration, a new
world order may be built up. It should, however, have u certain
institutional framework. An international economic organisation
should be set up, open to all countries prepared to accept these
leading principles, and all those States which arc willing to Join
should agree definitely to surrender certain economic questions
for decision and administration by a duly constituted International
Authority. Once again we must bring about a unified currency
and monetary system. The International Monetary Authority
should have the ultimate power of controlling both the total supply
of money and of expenditure within the member States ; because
only then can an active anti-slump policy be adopted. It is not
necessary to have the same currency adopted everywhere,
although it would be simpler and smoother if all countries have
the same monetary unit.

The objective of the International Authority should bo to
ensure freedom of trade as far as possible, although the right of
member countries to coutrol their foreign trade may be conceded,
provided certain definite and previously agreed principles of action
are adhered to. Freedom of movement of capital should be
allowed, although in the case of countries which are socialistic

WORLD ECONOMY AFTER THE WAR

35

and where all savings are in the hands of the government, tho
guiding principle that surplus capita! is freely allowed to lie
lent abroad is difficult of enforcement. In regard to the develop-
ment of unexploited regions, the policy of open door may be laid
down subject always to the over-riding considers: :on that the
resources should be exploited to the benefit of the people living
therein. Above all It is necessary that tin? right of free move-
ment of labour from one country to another should be secured.
There may be reasonable conditions imposed in regard to migra-
tion, but the dog-in-the-manger policy now adopted by various
nations should not be allowed.

A new world order based on free entry to all nations of tho
West and the East, the advanced and the lea* advanced, U the
only way by which civilization may yet be salvaged. There are,
of courec. difficulties ahead. Nor is it necessary that all should
enter ns members of the new organization. Provided the door is
kept open, and the policy pursued by this organization l* convin-
cingly shown to be in the inter®*!* of all, it is bound to be both
successful and productive of great good.

ECONOMIC FACTORS IN AGRICULTURAL
DEVELOPMENT :

By

K. C. Ramakjushnan

I. Economic Aims. Handicaps and Incentives.

The ultimate aim of all agricultural development should be
to ensure as high an income as possible for every worker on land,
and not merely raise the yield per acre or secure a larger return
on the capital invested. Comparisons arc commonly made in agri-
cultural publications of acreage yields of particular crops in differ-
ent countries without reference to the diverse conditions, social
as well as physical, in which they are produced. For instance, it is
not so well known that in China, which is quoted for high yield
per acre of rice and wheat, that the peasant had to sweat more than
in any other country on his tiny holding, especially because of the
lack of cattle power ; and for manure he has to depend largely on
night-soil. In Japan, again, which has next to Italy the highest
yield of rice per acre, the tenant cultivator has not only to put in
very hard work but he remains for ever in debt on account of the
forced use of fertilisers at the bcheM of his money-lending land-
lord, and is often obliged to pnjr off the interest due by vending his
children to toil in the small industries run by the same landlord.
It is no doubt necessary in old settled countries, where scope for
expansion of cultivation is limited and population is already press-
ing on the soil, that all effort* should be made to raise the yield
per acre, if only es a means to raise it per worker. But it is neces-
sary to reckon, in addition to Hems paid for in cash or kind, the
human cost involved in such production. It is not altogether n
matter for satisfaction that the Indian ryot “will struggle on
patiently and uncomplainingly in the face of difficulties in a way
that no one else could

The fundamental handicap to the development of Indian agri-
culture is the smallness of most of the holdings, to which a parallel
cannot be found in any western agricultural country. China and
Japan alone have tinier farms. Hard work and ample manuring
account for phenomenally high yields per acre in these two coun-
tries. In the newer lands of America and Australia where cultiva-

* Substance of three Lectures delivered at the Agricultural College. Coimba-
tore. In November 1939. under the Maharaja of Travancore Cunon Endow-
ment, University of Madras.

ECONOMIC FACTORS IN AGRICULTURE

37

vation is extensive the yield per acre i* low. but not the yield per
worker. In Western Europe, where holdings are smaller than in
America but bigger than in Asia, the yield per worker as well as
per acre is high because of intensive cultivation and the efficiency
of the farmer. It is only in India that the yield per acre os well
ns per man is low. Holdings are uneconomic and farmers are in-
efficient according to modern standards. Our holdings need to bo
enlarged as well as consolidated to become economic. It is a sign
of the low standard that prevails in India that the common concep-
tion of an * economic holding ’ is different from that which prevails
elsewhere. A holding that provides subsistence for the farmer's
family is called economic here, while among economists in the
West an economic holding generally Implle* a holding that can
fullv engage the productive powers of the farmer and his family
with the best available equipment. But whatever be the standard
adopted, the optimum size of holding would vary with a number
of fuctors: the nature of the crops, the conditions of soil, climate and
water-supply the capacity of cattle, the kind of equipment and the
efficiency of the farmer; «o that it is not easy to lay down n parti-
cular size under nil conditions Granting that the lower, subsis-
tence standard Is adopted and sizes are prescribed with reference
to pcrticulnr circumstance*, it will not be easy in several pro-
vinces to secure even the minimum for the agriculturists who need
It. unless perhaps the so-called ‘cultivable’ lands are all reclaim-
ed. We have little precise data on the nature of these cultivable
wastes, of the physical and economic difficulties In reclaiming them.
Opinions arc on the whole more pessimistic than optimistic. Tn a
country with so much need for further land settlement*, it is Im-
perative that the State should set up an expert body to Investigate
and suggest ways and means of utilising these wastes and alloting
them to fanners who show enough evidence of capacity to culti-
vate them, reserving for the State the po w er to resume them In
case of bad cultivation.

Another evil commonly associated with small holding, but not
exclusively confined to it. Is the fragmentation of lands of the same
holder. A revenue holding in Madras has been colled “ a conglo-
meration of fields and sub-divisions in a single village.” The big
holder has his holding as fragmented as the small one and makes
little attempt to consolidate It. Most of the fragments are leased
out to different tenants, the holder himself at best retaining a few
acres for eultivati'm by farm servants. A case for fragmentation
is often made out on grounds of diversity of soils and variety of

38

JOURNAL OF THE MADRAS UNIVERSITY

water resources in one and the same village, which permit diver-
sity of cropping and the spread of rides. But surely it would not
be difficult to divide all the lands in a village into three or four
blocks of arable land of different degrees of fertility or lying in
different levels or irrigated by different systems. The re-allocation
can be made in such a way that no holder need be refused any
particular class of arable land of which he had owned a fragment,
unless it was too small and it would be better to allot a compact
holding of workable size in one block. No reformer desires to pool
wet and dry and garden lands or pasture and wood lands. Every
owner of plots In these lands Is bound to carry on much better If
he gets a compact field In each class of land. This is indeed the
sine qua non of a number of agricultural improvements— of better
animal husbandry In particular. In Europe the open field system
with scattered strips of holdings— where, however, a medley of
crops In different stages of growth was not permitted as Is done on
our wet lands — has been doomed for over a century now, though
Its extinction seems to he a slow and painful process In some coun-
tries. The consolidation of fragmented holdings has been brought
about in many countries by means of legislation which permit ted
and aided a majority In an area to have all the holdings properly
restripped and nlloted. even if a small minority was obstructive.
The Punjab has succeeded in consolidating, by the more difficult
co-operative methods, about a million acres. 'Hie Central Provinces
more recently resorted, like European countries, to coercive legis-
lation. Though the law has been enforced in only one Division,
the area consolidated exceeds that of the Punjab, which has since
enacted similar legislation, though it continues also co-operative
methods. Co-operative consolidation is being tried in Madras, but
with feeble results so far. Only about 500 acres have been con-
solidated, all in one district.

Even if the reform is brought about by coercive legislation, it
should be realised that consolidation once effected cannot be proof
against further subdivision and fragmentation, unless the law and
custom of inheritance are changed and other avenues of employ-
ment are found for the future generation — whose numbers are bound
to grow more and more in excess of the requirements of land, judg-
ed by the trends in the growth of population on the one hand and the
possible progress of agriculture on the other. In fact, in every
country where agriculture has been held in high esteem, there is s
striking shrinkage in the proportion of agricultural population to
the total population in the last 50 or GO years. For instance, the

ECONOMIC FACTORS IN AGRICULTURE

39

fall in France was from 52 to 40 per cent, in Germany from 42 to
30 per cent, in Denmark from 50 to 30 per cent, and in the United
States it has gone down in the last 40 years from 33 to 22 per cent.
The same has happened in Scandinavia and Netherlands and in
Canada and Australia.

There is a fear that consolidation may mean more rural un-
employment on account of the scope it may offer for the use of
labour-saving machinery. This is likely; but it only shows up the
waste of labour that has been going on. It is also possible, on tho
other hand, that in a compact holding the scope for labour is widen-
ed by the digging of wells and lift irrigation or by the cultivation
of more valuable crops demanding along with other things more
labour per acre, e.g. sugarcane, plan terns, Cambodia cotton, tobacco,
fruit trees and vegetables and die production of milk— tlie demand
for all of which is bound to grow with an Increase in general
prosperity.

In India with land so scarce, capital so shy and labour so abun-
dant and cheap, the scope for the uso of labour-saving modunery
is limited in the vast majority of holdings, even if they be consoli-
dated. There is o slowly growing demand for a few types of power
machinery Uko the tractor plough, the oil engine or electric water
lift, and the sugareano crusher, which only the bigger landholders
can afford to purchase. Even they do not want sowing or harvest-
ing machinery. But the small holders can be encouraged to use
less expensive labour-aiding or labour-improving implements like
the mould-board iron plough, the seed-drill and the bullock-hoe,
on dry soils in particular. It is also possible, If they co-operate, to
buy or hire jointly and use in turns the costlier tractor-plough and
the cane-crushcr. There is little excuse, however, for oven smaller
fanners in scattered holdings iailing to use the belter seeds and
adopt the methods of conservation of local manures recommended
by the Department of Agnculture. The cost in either case is only
a trifle higher, and it is the least expensive way of increasing tho
return from land.

India though old in the art of agriculture is still an infant in
the adoption of scientific ways of production and unproved methods
of economic organisation. These are the mean3 by which European
peasants have been repeatedly able to defer the operation of the
law of diminishing returns on land. Indian cultivators have still
to try so many known improvements in the art (rather the science)
of agriculture, that the law of di m i nis h i ng returns, whose ultimate
validity may not be questioned by us. need not be a bug-bear now.

40

JOURNAL OF THE MADRAS UNIVERSITY

An Important negative cause of the slow response of the Indian
ryot to the efforts nude by the scientists and other agricultural
reformers is the lack of stimulus in In dia comparable to the severe
competition felt by peasants of Western European countries in the
seventies of the last century from the import of cheap grains from
the virgin soil of America. It is this that drove them into new and
more efficient lines of agricultural production and co-operative
organisation. It is only in the last ten years, that is since the Depres-
sion began, that India has come to feel the effect of the growing
competition, in foreign and even in home markets, from the tropical
po&essions of European Stales which have been most of them
developed in the twentieth century. Whether the Depression has,
on the whole, depressed more than it stimulated the Indian agricul-
turist, it is too early to say. Eut there are not wanting signs of an
increased interest on the part of enterprising ryots in certain dis-
tricts in the improvement of agriculture on modem lines. Strange
as it may seem, it is in the proximity of industrial and commercial
centres that the greatest progrv-a has been made In the technique
and organisation of agriculture.

A more rapid industrial development of India is desirable not
only from the point of view of self-sufficiency of the country and
an all-round efficiency of the people but also for the relief It will
ufford to land wluch is overcrowded and subjected to morcellement
by the Increasing number of heirs. Not all new industries need
be large or giant industries. Village industries might at first be
adversely affected, but there would still be spheres in which small
scale production would survive and supplement large scale manu-
factures, if aided by better tools and cheap electric power as in
Japan. Not only the artisans, but agriculturists will stand to gain
by the adoption of better tools and implements easily manufactur-
ed in industrial centres. Mocc chemical manures (the by-product
of heavy industries) and more organic manures (the refuse of
populous cities) can be obtained for the benefit of agriculture. Moro
capital, managerial ability and skilled labour are easier to procure
in an industrial than in an essentially rural environment. Better
business methods of credit, purchase, processing and sale are almost
always available in urban areas and they can be slowly imbibed by
rural folk in the neighbourhood. The market not only for the raw
materials of industry but also for staple foodstuffs and agricultural
specialities — in particular, fruits, vegetables, eggs, milk and ghee —
is greater in a prosperous industrial community than in a predomi-

ECONOMIC FACTORS IN AGRICULTURE

41

nantly agricultural society. But for the expansion of industries
and the consequent widening of markets, there would have been
little development of the dairy or any other intensive form of agri-
culture in Europe.

Let us not also forget that in Western countries like Germany,
Italy and Ireland the impulse and inspiration for rural reconstruc-
tion came from leaders, who were not agriculturists but were pro-
ducts of urban civilisation, like Raifleisen, Luzzatti and Horace
Plunkett.

IL Co-operative Organization of Agriculture.

It is a melancholy fact that after 35 years of working of tho re-
organised Departments of Agriculture in India the land under
improved varieties is only a fraction of tho toUl area under the
particular crops. For instance, of rice and groundnut, the improved
strains do not cover more than 5 per cent of the area under each,
while of cotton tho proportion U 20 per cent. A very important
cause of the feeble response made by the Indian ryots to the cllbrts
of the Department is the lack of capital not only for permanent
and substantial improvements but even for current cultivation ex-
penses. In fact many of them have not the wherewithal to main-
tain their families some months after tho harvest The proceeds of
the harvest arc nearly exhausted in paying oil the taxes und rules,
in making part payments to creditors, and in buying long needed
clothing and foodstuffs not grown on their own lands. All are not
able to lay by enough grains and other food-r.ufls grown on their
very fields for the rest of the year. They sell them at a low price
and later on purchase at a much higher price swelling thereby
the profits of tho merchants. A good harvest is a doubtful blessing
as it only enables the money-lender to recover more of his dues.

Not even seeds are preserved for the next sowing by all. If
they are, they are not carefully selected. There Is either inade-
quate appreciation of the superior seeds evolved by the Department
or inability to buy them. Inability to buy arises partly from lack
of funds and partly from lack of such seeds near at hand. Any
seeds stocked by merchants or money-lenders arc purchased or
borrowed at exorbitant rates. Ryots in some tracts have learnt to
value superior strains like GEB 24 of paddy and Co 2 of Cambocua
cotton. But no agency, steady and reliable, has been organised
to multiply those varieties and distribute them at reasonable rates,
as trained nursery-men do in western countries. This is a work
eminently fit to be undertaken by the agricultural graduates who
h anke r in vain for salaried service. Seed farms should be organis-

42

JOURNAL OF THE MADRAS UNIVERSITY

cd on co-operative lines in mudi larger numbers all over the coun-
try. A few stray farms here and there are hardly adequate.

The value oi manures, even of chemical manures like sulphate
of ammonia, not to speak of concentrates like oil-cakes and bone-
meal, is well understood in many wet land and garden land tracts;
but ryots suffer from a lack of credit facilities at reasonable rates
free from any taint of exploitation, and from the absence oi ail
organisation of their own which will supply these manures frve
from adulteration and at an economic price. Thai is why even
South India, which is said to be more ' lerliUser-mmdvd,' consumes
so little of these manures.

Implements like iron plougiis, seed-drills and bullock-hous are
slowly getting into favour, specially where speed and IhoruugluMKa
of cultivation ore essential, as ui the sugarcane and cotton tracts.
And yet the number of implements actually sold in South India is
for below the number that agricultural and industrial enthusiast.,
liko Sir A. Chaltcrton, expected, lhcrc is an important physical
limitation tn our province which makes the problem economically
more difficult of solution. We have a variety of soils and climates
dint call for a variety of implements in different tracts. This hin-
ders standardisation of implements and thetr manufacture on a
largo scale, which alone can reduce the costs ol production and
marketing and facilitate the supply of spore parts.

For over sixty years in Europe co-operative organisation luu
boen considered to be the only means of salvation lor petty pea-
sants, as without it the economics realised by larger iurms in secur-
ing credit, purchasing agricultural requirements, processing and
selling produce could not be realised by the smaller larras— though
in farming technique the small holders could at least hold their own
with the bigger ones in certain lines of farming, e.g. dairy und
poultry fanning and the cultivation of fruits and vegetables. The
supply of improved agricultural requirements was among the
cailiest type of co-operative services organised in Western Europe.
One of the ways to meet the growing competition from the Now
World was to intensify cultivation by the use of hotter seeds,
manures and implements. The supply of these at reasonable rates
and free from fraud was best done by co-operative societies of
producers. Another way to meet American competition was to
transform the system of agriculture into one of animal husbandry,
the disposal of whose products in distant markets was very much
facilitated by co-operative processing and marketing. In Ger-

ECONOMIC FACTORS IN AGRICULTURE

43

many though Raiffeisen began his experiments with credit socie-
ties, he urged them to undertake the supply of agricultural and
domestic requisites, the processing and selling of members’ pro-
duce and to promote the moral as well as material interest of mem-
bers.

In India the Raiffeisen credit societies had dominated the field
of co-operation for over 25 years and eclipsed all other f o r ms of
co-operative activity until recently. Yet not more than 25 per
cent of the villages have been at all touched by co-operative credit.
Even where the Raiffeisen system has spread, for all appearances,
the working of the system has revealed a number of grave defects
which are the subjects of enquiry by a committee. Over-dues have
mounted up with no prospect of clearance in the near future. At
least 25 per cent of the old societies will have to be liquidated at
once. A new type of society may be tried in these and otlicr
villages.

A fatal flaw In the adaptation of the Raiffeisen credit system
In India was that loon* might be granted for unproductive, If neces-
sary. ns veil as productive purposes. The rule was liberally inter-
preted and even ostensibly productive loans were utilised for the
elenrnnee of pressing prior debts, which could seldom be repaid
within the stipulated period. It took more than a quarter of n
century for those In charge of the movement to ronllse the need
for n separate land mortgage banking system to finance long-term
credit needs. Here again It b o matter for regret that our land
mortgage honks have been so far doling out loans to clear off the
prior debts of members, incurred generally for unproductive
nurooses rather than helping them to effect permanent
improvements on land or caulp the farms with durable
machinery. Pr -virion has been recently made for loans for
the sinking of wells, the installation of oil engines or
electric plant for lifting water or crushing sugar-cane etc.,
but as yet little has been done. The demand for such loans
does not easily come from the ryot. It Is for the banks to take the
initiative end educate the cultivator in the better use of long-term
credit facilities. The Government has been for over 55 years offer-
ing what are known as Taqavi loans for permanent improvements:
but for a variety of reasons, such loans are hardly popular with
the ryots. Taqavi loans have also been granted for short term
cultivation expenses, but not in normal years generally. The
recent practice in Madras of entrusting the grant of such loans to
the officers of the Agricultural instead of the Revenue Department
is n welcome change.

44

JOURNAL OF THE MADRAS UNIVERSITY

Agricultural improvement* have seldom constituted the real
purpose of a co-operative loan, either short-term or long-term. So,
whatever may bo the technical success of some of our co-operative
credit institutions from the purely financial point of view, it can-
not be said that the earning capacity of our agriculturists has been
increased.

In India rural credit societies, modelled as they were on Raif-
feisen’s, had among the objects provision for the supply of the
agricultural and domestic requirements of members, the purchase
nnd hire of machinery for the use of members, the sale of mem-
bers’ produce and the dissemination of the knowledge of the latest
Improvements in agriculture and handicrafts. Tills Imposing array
of alms was seldom taken up seriously, and there were not even
a hundred out of 11,000 rural credit societies In the Madras Presi-
dency that supplied or encouraged the use of improved agricul-
tural implements, manure and seeds. Hie art hoc supply societies
were small and spasmodic In functioning. The Loan and Rale
societies, of which there were more than a hundred, did supply
some improved seeds and manures. There were also n few Agri-
cultural Improvement Societies that had MippTv as one of their
functions and did business to the tune of Rs. 1 - 4 lakh* for the whole
Presidency for a year. Other Provinces did not have a more credi-
table record In promoting agricultural improvements and supplying
the requirements of modern agriculture. This is In striking con-
trast to the work done by co-operative societies In Western Euro-
pean countries nnd Japan. The Agricultural syndicates of France
nnd the societies of peasants in Belgium, guided by the Catholic
rlergv. have done more to Improve agriculture than departments
of State. In Japan, though co-operative societies were not pioneers
of new agriculture. 80 per cent of the 15.000 agricultural societies
supplied seeds, fertilisers, implements, etc. to the tune of 70 million
ven or Rs. 5 crores per annum — for a country- with but 18 million
acres of cultivated land.

Whether it is wise to separate supply from credit societies in
view of the scare the enforcement of unlimited liability lias creat-
ed in the minds of well-to-do ryots or to stick to multi-purpose
societies in view of the lack of human material to manage a variety
of societies might be a moot point in India. But. whether alone or
in combination, the supply of agricultural requirements was among
the most important activities of co-operative societies in Europe and
abroad. So powerful have some of the societies g row n that In a
number of countries they have through their wholesales taken up

ECONOMIC FACTORS IN AGRICULTURE 45

the manufacture of implements and manures and even the multipli-
cation of seeds for distribution to members.

Marketing of agricultural produce In a raw condition was the
most difficult and the latest of co-operative ventures to succeed in
Europe. As long as produce was neither uniform nor graded and
it met a local want, it was difficult to make a success of co-operative
sale. Producers of better quality would not accept the same price
ns for inferior crops and it was difficult to pool produce of different
members. The Society could not negotiate for a better price with
uneven qualities and it was often left with unsaleable surpluses of
members’ produce. Production did not Improve until a free nnd
sure flow of surplus produce to the world's market was secured for
the farmers. But the outside world would not care for produce
that was not Improved. This vicious circle was broken by leaders
who organised at the same time co-operative sale and agricultural
improvement.

Of all attempts at cooperative sale that have *o fnr been made
in Trdia. the most successful ore than of cotton rale societies parti-
cuWV in Bombav nnd MsAns— fudged by the volume of sales nnd
nrofifs earned for producers. TV success of these societies has
depended largely on the respon** made bv producers to the efforts
of the Agricultural Deportment to spread improved strains of cot-
ton Some of them Indeed started as seed societies, controlled nnd
guided bv the officers of the Department of Agriculture, who nnfu-
rally strove to find buyers of the new, cotton at higher prices than
of the older varieties. Even after conversion Into sale societies,
they did not rive un the work of spreading new varieties, for which
Ih-V received some subsidy 'rom tV Indian Central Cotton Com-
mittee Tlw Agricultural fVi— rs supervised cultnmtion work nnd
nl«o -red-d nnd dnsslfied tb- cottons. Such graded cottons nnfu-
m'l- commanded higher prices. They would no* do «o unless tb-
varieties were very widely edopted and a lerge and steady supply
of uniform quality were pouring Into the market systematically.
Smell quantities offered by a few individual imp-overs could not
withstand the competition or boycott of a ring of merchants. In-
deed such breakdown would be a setback to agricultural '■ mo fore-
men t in the tract. There is thus an intimate connection between
co-operative sale nnd agricultural improvement.

Co-operat iv e of mTV Is cumin- into prominence in the
cities and larre towns of Tndla The usual organisation is the milk
cimnlv union with its fy g adon s r*"- * in near the citv to which are
affiliated a number of societies in the neighbouring villages with

46

JOURNAL OF THE MADRAS UNIVERSITY

members having cows or buffaloes, more* often as a sideline to agri-
culture. The milch cattle live under better conditions than in the
congested city environment and the quality of milk is richer. But
conditions of transport are far from satisfactory and pasteurisation
of milk done at headquarters in the bigger unions is not as effective
as it would bo if conditions of transport and of handling in the
initial stages in villages were better. TTie more serious handicap
Is the continuance of milch cattle in the city, which really ought to
bo shifted to rural tracts In their own interests as well as In the in-
terest of public health. A great deal of improvement in the methods
of breeding milch cattle and of growing fodder is necessary before
the milk supply can be made a paying proposition for producers
and brought within the reach of ma»es of poor consumers in our
country. The help of n host of livestock and agricultural experts
would be needed if the problem of milk supply should be satis-
factorily tackled by co-operative organisations. Co-operative sup-
ply cannot for long compete with private suppliers and survive
them without a vigorous programme of improvement of breeds and
of fodder supply. This programme cannot be carried out in n
country where the individual herd b so small without n eo-opern-
t!vc organisation of producers. Animal husbandry b bound to bo
n sideline to the growing of cereal or other crops in most parts of
the country nnd especially in wot land areas. To be economic and
to utilise tho by-products of the farm, the individual herd must bo
smull, especially where draught cattle have also to be maintained.

Outside India the most successful of agricultural co-operative
societies Is the society for production and sale, the earliest and the
most typical of which b the cooperative creamery or dairy. The
surplus milk in rural tracts, far removed from populous
centres of consumption, is converted into butter and sold abroad
by the butter export organisation which could bargoln for the best
price. The skimmed milk is returned to members for feeding the
pigs kept for bacon production— Invariably a by-industry in the
dairy tract. Denmark was the earliest home of the co-opcrativc
daily where all the butter produced was exported, through a bottle
neck as it were, to Britain. Later on other countries in Europe
and overseas have developed a formidable dairy industry' mostly
on co-operative lines. India, however, docs not have any dairy
society of the Danish model. Our demand is not for creamery
butter but for ghee. Cold drawn creamy butter does not yield
good ghee: it becomes waxy and does not have the grain or flavour
of home-made ghee, and it does not keep like the latter.

ECONOMIC FACTORS IN AGRICULTURE

47

The supply of pure ghee is far short of the demand and with
the advent of hydrogenated and refined vegetable oils like Marvo,
adulteration has become far too tempting. There is practically no
pure ghee available in the urban or even in the larger rural mar-
kets. Ghee societies have been organised in the United Provinces
which merely collect and sell the ghee made at home by individual
members. It is doubtful whether with the best precautions of
societies and even good intentions ol members, genuine ghee can
be collected and marketed. In our view large quantities of uni-
form, clean and pure product can be guaranteed only when gheu
production becomes amenable to centralised manufacture as in the
case of butter in Denmark. The Imperial Dairy Institute’s method
of making ghee by the use of citric acid is claimed to yield better
and more ghee compared with the country method *of natural
souring.' Making of ghee direct from cream by heating it in a special
boiler is also in the experimental stage. If these experiments rut
successful and good ghee can be made on a large scale and use be
found by propaganda and otherwise for all the skimmed milk and
buttermilk— not so well relished now— live day will not be far
distant when we may have a nourishing ghee industry more or lew
on tho modol of the Da n ish Co-operative Creamery.

There is a strong case for tho cooperative manufacture of
sugar or at least cream jaggery from sugarcane. South India Is
better fitted to grow the best varieties of cane than Northern India
but it has a disproportionately small acreage under cane. A for-
midable obstacle to the expansion of the area is the difficulty of tho
disposal of cane after it Is harvested. There are not enough facto-
ries to absorb the canes at a reasonable price. If it is too much for
small farmers to establish a factory of their own on co-operative
lines as at Vuyyur, it is up to them or to their well-wishers to
organise smaller jaggery making societies with power crushers and
improved furnaces. Not only would this reduce the cost of pro-
duction of jaggery and thus stimulate the market for it, but it
could help tho producers concentrate their attention on cultivation.

There is ample scope, and from the point of view of agricul-
tural improvement great need, for the cooperative ginning and
pressing of cotton and decortication of groundnut. Success in
these lines has been demonstrated in Bombay and Madras. What
is needed is further extension.

III. Effects of Land Tenure and Taxation.

Conditions of tenure and taxation of land play an important
part in promoting or impeding agricultural improvement. For

JOURNAL OF THE MADRAS UNIVERSITY

48

more than a century in Great Britain leadership in farming was
in the hands of l andlords who had enlarged and enclosed their
estates by buying oil the numerous strips of yeoman tanners, often
with the proiils made in trade, and invested capital in long-term
improvements like drainage works and farm buildings and did
pioneer work in the cultivation of better crops and the breeding of
pedigree stock. It is the success of these ventures that made Bri-
tain the pioneer of modem agriculture, as well as of large-scale
manu f actures. Hus penod of prospenty lasted for over a century
—from 1750 to 1870. After 1870, however, American competition
killed cereal fanning; there was a continuous fall in rents, while
the cost of cultivation, particularly wages, increased. Arabic farm-
ing gave place to grass farming and stock-raising. Industries were
more paying than agriculture, industrial magnates bought land
more for its amenities and social prestige than for its profits as a
farm enterprise or for the love of agricultural research. Research
indeed passed into the hands of several specialists and it was be-
yond the capacity of any landlord to set himself up as a leader in
science or technique. Continuous increase in income-tax and death
duties led to the break-up of big estates and many old farmers
became, in the first thirty years of this century, occupying owners
with the help of the State. But a decade of falling prices has im-
poverished these owners too, who have little capital left to work
their farms. Small holdings in certain specialised lines oi agricul-
ture like dairying, fruit culture and vegetables arc still favoured,
but for staple cereals large scale mechanised farming with Stato
ownership of land and control of cultivation is advocutcd.

It is strange that when such radical changes have been going
on in Britain for many years now, so many British administrators
coming over to India even in recent years should harp upon the
British tradition of landlord-leadership in scientific agriculture and
appeal to the landed aristocracy in India to give a lead in agricul-
tural improvement.

We can understand Lord Cornwallis, the author of the Perma-
nent Settlement in 1793, expressing the hope that the zamindars (in
Bengal) would exert themselves to spread and improve cultivation
in their estates, of which they had just then been made proprietors
and assured immunity from enhancement of peishkush which they
had agreed to pay. He had evidently in his mind the contemporary
E n gli s h ‘ improving landlord.' Some zamindars no doubt had the
jungles cleared, canals cut, tanks dug, and temples and ghats built.

ECONOMIC FACTORS IN AGRICULTURE

4U

The area of cultivation was extended. But there were few zamin-
dars either in Bengal or in other provinces, where the Permanent
Settlement was soon after introduced, who took any active interest
in cultivation, even on their own home farms, of the better types
of crops with better implements and fertilisers or in the improve-
ment of livestock, the breeding and rearing of which were carried
on by backward tribes. Most of the zamindars went on rack-rent-
ing with the growing competition for land, using their power to
evict tenants as a lever to enhance the rents. Even after the
enactment of tenancy laws, the provisions for the commutation of
kind rents, for the occupation of old wastes, and the summary re-
covery of dues were all abused to such on extent that tenants liave
been crying for reduction of rates to the levels prevailing in neigh-
bouring ryotwari areas, which are themselves quite high.

The abuse of the system reached its worn in Bengal, where
moot of the zamindars became absentee landlords and a series of
intermediate tenure-holders with right* of their own have sprung
up between the zamindars and the actual Ullers of the soil. The
ryots in other zamindari tracts too are not all cultivators; many ol
them let out their lands, of which they have now occupancy rights,
to impecunious labourers for a fixed or sharing rental. Such a
dissipation of interests in cultivation Is not conducive to any im-
provement in agriculture.

Nor arc all the ryots In ryotwari areas cultivating their hold-
ings. Big as well us small ryots have mostly fragmental holdings;
little or no attempt is made to consolidate and improve them; and
the different fragments are generally sub-leased to different petty
tenants-nt-will, most of whom live on the margin of subsistence.
Those who cultivate on the varam or crop-sharing tenancy system
— analogous to the metayage in Europe — either as tenants of zamin-
dars or of ryots have the least incentive to cOccUng any improve-
ment. Where, however, fixed cash leases are the rule, as in the
case of valuable commercial crops, and the tenants are men of re-
sources and spirit of enterprise, they invest capital in the purchase
of better seeds and manures. Except in the case of tree crops, as
in Malabar, such tenants are not anxious to stick to the cultivation
of particular pieces oi land. They move from one land to another
paying rents according to soil, irrigation and market facilities.

The Royal Commission on Agriculture pointed out incidentally
— land tenure was outside the terms of reference — that large scale
7

50 JOURNAL OF THE MADRAS UNIVERSITY

farming ‘ though open to many is practised by few’. Among the
reasons given, tenancy legislation, the primary object ol which
was to confer security oi tenure on ryots in the estates, is said
to have rendered it difficult tor large land-holders to obtain un-
restricted possession of compact blocks oi land. But we wonder
if many of them are yearning to practise scie nt i f i c farming for the
benefit of themselves and their ryots, alter missing splendid
opportunities to set up model home farms in the past.

Sir John Russell reviewing the progress of agricultural re-
search and its application in India in 1937 la men ted the lack of an
agricultural aristocracy analogous to Uie British landlords or tho
large farmers, “rooted in the sod and ready to try any improvements
suggested by experimental stations and anxious themselves to de-
vise improvements, which are so me ti me s better than those oi the
experimental stations." Whatever the past might have been,
recent investigations like those of As tor and Rowntrce tell
a different and distressing tale of large fanners in Britain.

In respect of dairy industry again, Mr. F. Ware, an authority on
animal husbandry, has suggested that "the wealthy landowning
classes of the country might give their support by maintaining hign
grade herds of pure bred indigenous dairy cattle and by supplying
approved sires for use in the villages."

Agricultural reform In other European countries took u dif-
ferent turn from that in England. After the Napoleonic wars,
measures were taken to abolish serfdom on land in most oi the
Western European countries; and the Code Napoleon established
equal inheritance of land among all the sons of a father. With the
growth in population in the 19th century holdings naturally tended
to become smaller in size. There were few landlords lclt oi tho
type of English landlords, except in East Prussia. In tact the Stato
oflered little encouragement for the growth of big estates, while
steps were taken to break them up and settle the workers os pro-
prietors. Consolidation of fragmented holdings was cliected by
permissive legislation in most countries and the subdivision oi
holdings below the minimum economic unit was prevented by law.
There was indeed little of the worship of the large estate as in
England, though the economies of large-scale production and mar-
keting were before long appreciated. Such economics were effec-
tively realised by the variety of co-operative organisations, most of
which were inspired by the spur of necessity to meet the American
competition. It was foun d that m respect oi production in certain

ECONOMIC FACTORS IN AGRICULTURE

51

lines, small holdings were by no means inferior to large ones, and
much of the land was devoted to such specialities. The processing
and marketing of such crops demanded more of co-operative effort,
and hence it is that all over Western and Northern Europe, co-
operation has been treated as a necessary complement to peasant
proprietorship. For instance, in Denmark it is not the big farmer
that is reputed to breed and rear good cows. More than 90 per
cent of the herds consist of less than 15 milch cows each. Though
Denmark took up the development of dairy breeds long after Eng-
land, the red Danish cow Is not Inferior to any English breed in
respect of yield of milk and butter fat. This has been achieved by
the co-operation of the State department and the peasant co-opera-
tives for milk recording etc. Progress has been achieved in smal-
ler lines— in the production of oats, barley and potatoes by Belgian
peasants and in the raising of wheat, fruits and vegetables by tho
Dutch peasants almost entirely by their multifarious co-operative
organisations. Scandinavian and Baltic States achieved equally re-
markable progress by co-operative methods. An agrarian reform
nmountlng to a revolution was effected in Central and Eastern
States of Europe after the bit war by the conferring of ownership
right* on cultivators and by the break-up of big estate*, which
were not fully compensated : and even here co-operation was called
in to the aid of the new peasant proprietors.

With such splendid models before them of progress achieved
by peasants co-operatively organised, we wonder why the British
authorities should still go on appealing to effete landlords Instead
of earnestly helping to build up a sound, all-round, co-operative
movement, which has been the greatest instrument of agricultural
progress all over Europe. Perhaps as Mr. L. D. Gammnns of the
Malayan Civil Service says : " The Englishman in the East is pro-
bably more ignorant of co-operation than most other Europeans.
With the exception of consumers’ store, which does not appeal to
any great extent to the educated classes from which the British
official is largely recruited, co-operation in Great Britain Is little
developed. The ordinary Englishman is apt to know little of its
other possibilities and is less conversant with the co-operative
organisation of agriculture than the German, the Dutchman, or the
Dane."

Though peasant proprietorship is, or the whole, the best sys-
tem of tenure in India where capitalistic or socialistic large scale
farming Is out of the question on account of the nature of crops.

52

JOURNAL OF THE MADRAS UNIVERSITY

the scarcity of land and the abundance of labour, it is neither
possible nor desirable to do away with tenant-farming. There are
good cultivators who do not like to have their little capita! locked
up in the purchase of land, which is better used in working the
farms that they take up for lease from time to time. An impartial
tribunal that will fix up fair rents and compensate for loss for any
premature eviction, combined with facilities for co-operative credit,
supply and sale would for them be ample substitutes for the
‘ magic of property ’ in land .

In fact co-operative societies may be organised by tenants who
can tako on lease a large piece of land or several pieces from one
or more landlords. Joint fanning may be tried or at least an
attempt may be made to consolidate cultivation units and each
member may take charge of one unit. The bargaining power of
such co-operative ventures will be greater than that of petty indi-
vidual tenants competing among themselves. The advantage may
not be on the side of tenants alone. Many an absentee landlord
and Institution owning laud, not to speak of reasonable local land-
lords, would be pleased to deal with a well-knit co-operative organi-
sation than with a number of poor tenants. Agricultural graduates
can play a great port if they can organise and manage such societies
taking on lease the lends of temples, endowed charities and Insti-
tutions and the lands that have came into the hands of co-operative
hanks, insurance companies, etc., even as their confreres in
America have organised themselves into agricultural management
companies for a similar purpose. They can serve as managers and
share the profits of the enterprise with all the working members.
They can set a higher standard of cultivation and reduce the evils
of a recklessly competitive and wasteful tenancy system.

Land revenue in ryotwari areas, assessed on the theory of
State landlordism and revised only in 30 years, was felt to be a
heavy burden even in periods of rising prices. It Is certainly
oppressive in a period of falling prices and intolerable in years of
drought, when remissions are by no means liberal. At any rate
the rigidity of the rate with no automatic provision for remission in
years of scarcity of rains, or of fall in prices, is not conducive to
the investment of capital in agricultural improvements except of
the kind, like sinking of wells for which provision has been special-
ly made for exemption from enhancement of rates. This exemp-
tion has surely given a great fillip to the digging of wells and the
mechanical lifting of water in some districts. The exemption need
not indeed be permanent, but may be reduced to a period of 30 or
40 years as in the Punjab, without detriment to improvements.

ECONOMIC FACTORS IN AGRICULTURE 53

The comparatively well-off ryots dissipate their extra earnings
got in years of belter yield or higher prices, or divert them to
the purchase of more land rather than invest them in any substan-
tial improvements on the land they already have. Agricultural
experts should look for such opportunities and induce such earnings
to he invested in improvement of land or purchase of plant like the
waler-lift, tractor-plough, cane-crusher etc.

Land revenue is said to be a tax on land and not on persons
nnd is being imposed on all alike. It is a regressive tax pressing un-
duly on the poor, who have in good years little left to spend on
improvements. Taxation of higher agricultural incomes, over nnd
above a reduced flat rate of revenue, is bound to be introduced in
all provinces, as It has already been done in Bihar and Assam.
With a view to encourage greater productivity on land, concessions
may be shown for improvers of land and crops by making liberal
allowances for expenditure on improvements of approved types.

The existing system of taxation of water Is not scientific and
it leads to a lot of waste of water and injury to the land. But volu-
metric taxation of water would be costly to administer without a
system of co-operative distribution of water among the users.
Exemption of charges now graded for the use of water in growing
preen manure crops may well be extended to use of water for
raising fodder crops In areas with a deficiency of fodder. A part
of the local land cesses now spent by local bodies on a variety of
objects may be earmarked for agricultural improvements by the
organisation of propaganda, demonstration and systematic instruc-
tion by Itinerant teachers employed by District Boards, even as
County Councils are doing in Great Britain.

Export duties on manuria! resources like oilseeds, bones and
fish have been time and again recommended by agricultural experts
with a view to bring down their prices and induce greater use
within the country, so as to conserve soil fertility and produce
l«etter yields. Such duties might in the first instance hit producers
of such materials, though the merchants would bo hit more; but
in the long nm they would stand to gain by greater demand within
the country and the reduction of middlemen's profits in Internal
trade.

Import duties on competing foreign produce with a view to
stabilise the prices of home produce have been freely resorted to
in almost all European countries. But for over a century the free
trade policy of Great Britain has stood in the way of any similar

54

JOURNAL OF THE MADRAS UNIVERSITY

protection to her crops, and incidentally to our crops too
even when the need has been felt for it in recent
years. South Indian producers, having to incur greater

costs of cultivation on older soils and irrigated lands, have
been crying in vain for protection from Burma and Siam
rain-fed rice and Ceylon plantation copra . The greatest

and the most successful departure from free trado tradition has
been made in the case of sugar — though more in the interests of
manufacturers than of cultivators — and this accounts for the sud-
den expansion of sugarcane area even in South India, which really
is better fitted to grow cane than North India, but suffers from want
of factories to absorb the canes grown An extension of such pro-
tection to other crops may be opposed on the score of the poverty
of consumers. There Is also the danger that it may remove an Im-
portant spur to Improvement; for the temptation to go to sleep be-
hind the tariff wall is greater in this country.

This course of lecture*. It Is hoped, has brought out the domi-
nant Importance of the economic factor* in the development of
agriculture, which educational and research workers will have to
take into account. Nowhere has the importance of agricultural
economics been so well recognised as in the United States. It
would, therefore, be fitting to conclude this course with an extract
from n statement made twenty years ago by H. C. Wallace, the
famous Secretary of Agriculture, who organised the Bureau of
Agricultural Economics.

" Help in their economic problems is now the most urgent
need of our farmers. TTiis is not to say that the Department
is lasing sight of production matters. The farmer needs all
the help in his production problems that the Departments of
Agriculture. Colleges and experimental stations can give him;
but the need of the most importance now Is the development
of Bn entirely new realm of organized knowledge bearing upon
the economic factors of agriculture, looking towards cheaper
production, improved methods of distribution, and the enlarge-
ment of markets, all to the end that the prices the farmer
receives shall be more fairly related to his cost of produc-
tion."

STUDIES ON THE CHEMISTRY AND BIOLOGY OF PONDS IN

THE MADRAS CITY

Seasonal Chances in the Physical and Chemical
Conditions or a Garden Pond containing
ABUNDANT AQUATIC VEGETATION

By

S. V. Gan ap ati, M.Sc, AJ.C.,

Water Analyst, ike Corporation oj Madras.

1. Introduction

lu my paper on -The Ecology of a temple contain-
ing a permanent bloom of Microcystis aeruginosa" 1 have
explained the object of these studies. Hie pond now under
invesugation typically represents the first of the three groups of
ponds found in Madras, namely, those containing abundant floating
and submerged macrophytic vegetation : and it may therefore be
compared to the Literal region of temperate lakes or swamps of
the tropics. They are sources of serious trouble to the Municipal
Corporation as they ailord breeding places for the larvae of malari-
al mosquitoes. They are also id great scientific interest inasmuch
as they contain scarcely any phyto and zoo-plankton. The seasonal
variations in the physical and chemical conditions of their waters
arc not so well known as those of lakes (Carter and liecdle 193U-
32) and this aspect of the subject has been comparatively neglected
in India (Bharadwaja 1940). An attempt has therefore been made
in this paper to trace the changes during a year in one of the garden
ponds of Madras.

This pond is situated mid-way between the office building and
the Hostel attached to the Y.W.CA, Vcpcry, Madras; and is nearly
rectangular in shape and measures about 300 feet long, 150 feet
broad and 4 feet deep at full pond level Its bottom is almost flat
so that its depth is nearly uniform at all places in the pond. On
the east, north and south, tall trees with leafy branches cast their
shadows, while the west end is open. It receives the drainage from
the kitchen and the bathroom of the hostel, throughout the year.
Also, it gets filled up during the north-east monson season, when
the storm water from the compound is allowed to drain into it.

56

JOURNAL OF THE MADRAS UNIVERSITY

Quite possibly, it may also receive a small quantity of spring
water. Its banks are grassy and vary in width during the different
seasons of a year. At full pond level, the outer margin slopes
rather sharply towards the water. Its bottom is covered with soft
accumulated deposits of organic debris in most places.

Observations on the physical and ch e mical conditions of the
pond water and on the nature of its aquatic vegetation were made
once a fortnight or more often once a month between February 1934
and January 1935. Samples of water were collected just below tho
surface of water from nearly one and the same place on the eastern
side between 9 and 10 a.m. The results are shown in Table I!.
Table I contains the meteorological data of the period covcrod by
the investigation.

2. Meteorological Notei

(a) Temperatures The average daily temperature of the at-
moaphere varied from a minimum of 74 -9 F (in December) to a
maximum of 87-5T (in Muy). There was a gradual rise from
February to Muy when the maximum for the year wus reached
and from May onwards there was a gradual fall till December,
when the minimum for the year was reached. There was a rapid
rise from the end of the cold weather period to the beginning ol
tho hot weather period; but there was a sudden drop from tho end
of the hot weather period to the beginning of the south-west mon-
soon season, and also from the end of the south-west monsoon
season to the beginning of the north-east monsoon season.

(b) Hours of bright luuhtw. — -Use number of hours ol bright
sunshine varied from a minimum of 5-6 (July) to a maximum of
10-8 hours (February and May). The hours of bright sunshine
varied between 9-7 and 10-8 during the hot weather period;
bet wen 5-6 and 8-0 during the south-west monsoon season; between

6- 4 and 7-9 during the north-east monsoon season and between

7- 6 and 10-8 during the cold weather period. The maximum num-
ber of hours was recorded during the hot weather period and mini-
mum during the south-west monsoon season.

(c) Percentage of cloudy day.— The percentage of cloudiness
varied from a minimum of 28 (February) to a maximum of 83
(July). The sky was most cloudy during the north-east monsoon
season and least during the cold weather period.

(d) Total Rainfall — -The rainfall varied from a minimum of nil
(February) to a maximum of 16-82 inches (October). There was

STUDIES ON PONDS IN THE MADRAS CITY

57

a gradual increase from February to October when the maximum
for the year was recorded and thereafter there was a considerable
decrease. Maximum rai nfa ll was recorded during the north-west
monsoon season and minimum during thf cold weather period.

(e) Wind Velocity. — The velocity varied from a minimum of
of 152 miles per day (February) to a maximum of 235 miles (De-
cember). A gradual increase in the wind velocity was noticed
from February to May, when the first maximum was reached; from
May onwards, there was a decrease till August; and again from
August there was a rise till the second maximum was reached in
December. From December 1934 to January’ 1935 there was a
decrease.

3. Aquatic Vegetation

There were two” types of vegetation, in the pond; floating and
submerged. The former was represented by two member* of
Nymphacceae— the yellow water bly, Kuphar and tho white water
lily, Nymphaea— and th© latter by IlyarUU varticaUata and Najat
licxiUt. On 8th March, the lilio* were found to cover marly tho
western half of the pond, while they were found growing scattered
in the eastern half. This condition prevailed till 2nd August when
all the plants were found to have bom removed. They were seen
ugain growing from 6th September to 30th January in the same
manner us observed on 8th August.

As regards the submerged type of vegetation, the mast domi-
nant plant was Hydnlla vrrUccllala, which was found to cover the
entire bottom of tho pond. Next in order of abundance came Nojas
llttXiht, which was found growing more in the western than in the
eastern half of the pond.

Rotting vegetation of HydriUa, S’ajas , and Spirogyra tp, was
seen all round the water margin on 27th April, May and June
when the level of water was very low. All the plants were found
to have been completely removed on 14th June and again on 22nd
August by the Health Department of the Corporation. They were
found growing again from 6lh September to 30th January 1935.

4. Physical Conditions

L Temperoture o/ icater.— Table II shows that the amplitude
of variation was from a minimum of 25‘8 C in December to a
maximum of 32 -4 'C in April. The temperature curve showed a
gradual rise from February to April followed by a fall till August,

8

58

JOURNAL OF THE MADRAS UNIVERSITY

when there was a rise again accompanied by a fall. The temperature
changes of the water seemed to follow those of the atmosphere.

2. Colour . — It was brownish and clear throughout the year

5. Chemical Conditions

L Dissolved oxygen.— The oxygen content was iound to vary
from a m i n i m um of 2-30 cc/1 on 22nd August to a maximum ot
10 '03 cc. on 21st June. The water was found to be supersaturated
on 22nd February, 21st June, 14th July and 23rd November. The
oxygen content was fairly high in the hot weather and in tire first
half of the south-west monsoon season, and lowest in August and
high again in the north-east monsoon s*t » so ni

The fluctuations in the oxygen content of the pond water did
not seem to follow the law of solubility of gases. A careful study
of the temperature and oxygen curves shows that with the increase
of temperature oxygen also increased on 27 th April and 19th Sep-
tember; and with the decrease of tcxnpcruturc oxygen also dec-
reased on 26th May, 8th and 22nd August. From the above it
would appear that the law of solubihty of gates was not the decid-
ing factor. Thu point is dearly illustrated by the oxygen satura-
tion graph also. Therefore, the explanation for the observed varia-
tions in tho oxygen content has to bo sought in the respiratory and
photosynthctic activities of tho vegetation and m the content of
organic matter in tho pond.

The amount of dissolved oxygen, generally, was high from 22nd
February to 14th July while it was low in August and September.
It was not so high in the north-east monsoon season as in the cold
weather and hot weather periods, when the average number of
hours of bright sunshine was higher. This observation therefore,
would seem to indicate the dependence of dissolved oxygen upon
the intensity of bright sunshine, when the submerged plants are
able to carry on active photosynthesis.

Another factor of importance which accounts for the
presence of large amounts of dissolved oxygen, in a piece
of water, is the abundance of chlorophyll-bearing plants.
The greater their abundance, the greater the photosynthetic
activity, and consequently the greater the possibility of the
production of oxygen. As has already been stated, this pond water
contains an enormous amount of macrophytic vegetation resembling
an East African Swamp, in a shallow depth of wafer. The super-
saturated condition on 22nd February, 21st June, 14th July and
23rd November can be ascribed only to predominance of the photo*

STUDIES ON PONDS IN THE MADRAS CITY

59

synthetic activities of the plants over their respiratory activities.
Again the high oxygen content viz., 6-68 cc/1 on 23rd November,
when the water was supereaturated (153-7%) shows that the
photosynthetic activity was greater than the respiratory activity
even in the north-east monsoon (October to December). On other
dates, consumption of oxygen exceeded production. This fact would
show that the processes of absorption of oxygen dominated over
those that discharged it, and that unfavourable conditions for
photosynthesis were prese n t on those dates. Decomposition of orga-
nic matter rather than its synthesis was possibly then going on in
the pond.

2. Free Carbonic and. — Excepting on one occasion free carbo-
nic odd was absent throughout the period of investi Ration. Its pre-
sence on 22nd August has to be attributed to the thoroughly alter-
ed conditions of the pond water resulting from the removal of all
the plants from the pond, a few days prior to the day of sample col-
lection. Its absence on nil other days may be explained as being
due to its utilisation by the abundant raacrophyta. or to the high
temperature of water with the consequent liberation of carbon-
dloxlde into the air (Welch 1935).

3. If ydrocarbonatcs end Kcarbonatea.—' The hydroenrbonates
varied from a minimum of 0-3 part on 6th September and 26th
October to a maximum of 4-80 parts per 100.000 on 27th April 1934.
They were found to increase generally from the cold weathot
period to the first half of the south-west monsoon season and to
decrease thereafter.

Bicarhonatcs varied from a minimum of 0-92 pari on 22nd Feb-
ruary to 17-51 ports per lOt'MO on 22nd August. They were least
during the cold weather period and highest during the south-west
monsoon season. They increased from the cold weather period till
the maximum was reached in the south-west monsoon season, and
were found to fluctuate during the rest of the year.

From a study of the figures for carbonates, bicarbonate? and
dissolved oxygen, the whole year can be roughly divided into two
periods: the first period i.e.. February to July when the carbonates
were hich. bicarbonates low (exceptions being June and July) and
dissolved oxygen high and the second period i.e. August '34 to Janu-
ary '35. when the carbonates were low. bicarbonate* high and dis-
solved oxygen low. The former may be considered as one of very
active photosynthesis or as a period of greater formation than des-
truction of organic matter and the latter as one of mild photosyn-

JOURNAL OF THE MADRAS UNIVERSITY

thesis or as a period of greater decomposition than formation of
organic matter, from the viewpoint of oxygen saturation of water.

4. Hydrogen-ion concentration (pH). — The pH values varied
from a minimum of 8-2 on 6th September to a maximum of 9*3 in
April and May. They were highest in the hot weather and in the
first half of the south-west monsoon season, and lowest in the latter
half of the south-west monsoon and north-east monsoon seasons. It
is well known that the pH value of a piece of water is influenced by
the amount of carbonates of calcium and magnesium and the C0 a
tension. The latter In Its turn is influenced by temperature, and the
photosynthetic activity of the vegetation and animal life in the
wafer. In the pond under investigation, excepting for larvacidal
fish introduced into it for destroying malarial mosquito larvae, ani-
mnl life was poor, so that the chief factor controlling the pH appears
to l>e the vegetation.

The data for pH and temperature of the water show that the
former Increases in the hot weather ar.d in the first half of the
south-west monsoon season, when the latter Is fairly high (over
30 °C). The maximum pH values are followed by a fnll In the
second half of the south-west monsoon season, when the tempera-
ture of the water is generally kss than during the former periods.
It would, at first sinht. therefor*, appear that changes of tempem-
ture control the pH values of the water In the pond.

That it was not really so. Is shown by the results for tempera-
ture and dissolved oxygen on 22nd August and 6th September,
25th October and 23rd November and 13th December and 30th
January *35. The decrease In pH. especially In the second half of
the south-west mon«oon and north-east monsoon seasons might be
due to the rotting vegetation, which had increased the bicarbonate
content, Not until February, however. Is there a sharp rise in pH
Indicatin'? greater assimilatory activitv of the chlorophyll-bearing
plants in the water. Again, the high pH values (8 -2 to 9-3) of the
pond water should be due to the same cause by which calcium car-
bonnte Is precipitated and pH 9-0 is readied (Atkins 1922).

Atkins and Harris (1924) have taken the criterion of satura-
tion of their tank water according as its pH values were at or al-
ways above 8 1. This pond water whose pH values have always
been above 8 1. must be considered, according to that criterion,
always saturated or supersaturated with oxygen. But it was not so
saturated. Excepting on 22nd February. 21st June. 14th July and
23rd November, it was imder-sa'urated on all other dates. These
observations show that no such generalisations as has been made by

STUDIES ON PONDS IN THE MADRAS CITY 61

Atkins and Harris can bo made in the case of ponds which contain
excessive aquatic vegetation. A conclusion similar to mine has
been arrived at by Kolkvritz (1914) and Pearsall (1923).

The data for pH, carbonat's, bicarbonate^ and dissolved oxy-
gen show intimate relationship on a few occasions. On the 11th'
April. 19th September, and 23rd November there was an Increase
in oxygen, carbonates and pH and a decrease in bicar bonates over
the corresponding figures for 27th April, 6th September and 25th
October

5. Total Solids .— ' The figure varied from a minimum of SO 6
parts on 22nd March to a maximum of 117-6 parts per 100,000 on
22nd August. There was also a seasonal chan re, which was high
during the latter half of the south-west monsoon season and low
during the hot weather period The decrease In March. April and
May was probably due to th- precipitation of the carbonates of cal-
cium and magnesium, and the increase during the south-west mon-
socn censor. (June to September) to the dissolution of the preci-
pitated carbonates of coldum and magnesium by carbon dioxide
which resulted from the decomposition of organic matter by bade-
rial action.

A study of the data for solids and pH confirms the above con-
clusion. When the pH Ls high (9-1— 9-3) as In the hot weather
period, the values for total solids are low. and when the pH Is
low (8-2 to 8-4) as In the latter half of the south-west monsoon
season, the values for total solids are generally high.

0 Total Hard tew. — The figure varied from a minimum of
17-0 In M»r<*h Anrll nrd May to a maximum of 32*0 parts on
?2nd Angus' It w*« the some (12 -A parts) during the hot weather
period nnd gradually Incre-acd in the south-west monsoon and
decreased during the north-ca«t monsoon season.

Tho low figures In the hot weather period were due to tlio
precipitation of the carbonates of calcium and magnesium due to
photosynthesis by the aquatics in the water: and the high figures
during the south-west monsoon season to increase In the content of
hicarhonates : and the low figures a earn during the north-east mon-
SOcn season *e dilution on account of rainfall.

7. Photp&ote*. — They were found to vary from a mere trac*
or nil on 14*h July to a maximum of 0-006 on 13th December.
They were vers* low from March to August and high during the
rest of the year. Throughout the year their production continued
from excessive plant ""ai-lns by hnrt<*rial action. Carter and
Beadle (1930-32) found that the concentration of phosphates was

62 JOURNAL OF THE MADRAS UNIVERSITY

higher in the tropical Paraguayan Chaco than in temperate lakes
of the same type, and Carter (1932-34) reported that they were
absent from the open water of the tropical East African swamps.

8. Silicates.— 1 These were found to vary from a minimum of
’0- 16 part in January to a maximum of 0-90 part on 22nd March
’34. They were high during the hot weathei and south-west mon-
soon seasons, when the water was more alkaline and low during the
north-east monsoon season when the water was comparatively less
alkaline. Also one should expect a greater amount of silicates on
account of the high alkalinity of the pond water, but the quantities
were not really very high. "It is probable that the temperature
changes affect the solubility of the soil silicates and their rato of
hydrolysis resulting in the precipitation of silica” (Atkins and
Harries I.c.).

9. Chloride*.— They were found to vary from a minimum of
V! M parts on 13th December to a maximum of 29-5 parts per
100 000 on 14th June. They were very high during the south-west
monsoon season and very low during the north-east monsoon
season; ami they increased gradually from February to June
when the maximum for the year was reached and decreased there-
after till the minimum was reached in December TT»e high con-
tent of chlorides in the south-west monsoon season was due to low
level and the restating concentration of the pond water and the
low content in the north-east monsoon season to dilution due to in-
creased level on account of rainfalL

10. Organic matter (Tidi/* 4 hours test) and its decomposi-
tion products. — (a) Organic matter was found to vary from a mini-
mum of O' 167 part in December to a maximum of 0'70 part per
100.000 on 22nd August. It was least during the north-east mon-
soon season and highest during the south-west monsoon season.
This was also found to increase gradually from February till the
maximum was reached on 22nd August and to decrease thereafter
HU the minimum was reached on 13th December.

(b) Ammoniacal nitrogen.— This was found to vary from a
minimum of trace on 22nd March to a maximum of 0 • 006 part per
100 .000 on 23rd November. It was found to be very low (trace to
ft 003 port per 100.000) in the cold weather, hot weather and south-
west monsoon periods and comparatively high in the north-east
monsoon season.

(c) Albuminoid nitrogen. — This was found to vary' from a
minimum of 0-022 port on 22nd February to a maximum of 0-176
part on 25th October. It was found to increase from February till

64

JOURNAL OF THE MADRAS UNIVERSITY

June, when the first maximum was readied; and thereafter to dec-
rease in July and to increase again and to remain almost the same
in August and September and to reach the second maximum again
in October and finally to decrease.

(d) Nitrous and Nitric nitrogen ,— They were absent through-
out the year. In this pond, aquatic vegetation has been stated already
to be abundant By its death and decay, it adds organic matter
to the water. The greater the organic matter in solution, the
greater will be the decomposition by bacterial action, so that the
greater will also be the products of iu decomposition. This rela-
tionship appears to hold good only from February to September,
i.e., the period during which the conditions for existence in the
pond are not altered considerably by cxtcxnul factors such as heavy
rainfall. A study of the data and graphs lor oxygen absorbed and
albuminoid nitrogen shows this point clearly.

Therefore, one should expect during this period, an increasingly
large amount ol ammoniacal and albuminoid nitrogen, nitriles and
nitrates, these being the final products of decomposition of organic
matter. But no such progressive increase in ail the factors except-
ing albuminoid nitrogen has been noticed. Ihc cause for Uie ab-
sence of nitrites and nitrates has to be explained. It is well known
that they constitute the most important nutrient substances iui pro-
ductivity in any piece ot water. It is, therefore, quite probable
that they are consumed by tha abundantly growing aquatic vege-
tation In the pond as soon as they are formed (Atkins 1932-33).
Ammoniacal nitrogen also is not found in great quantities and it
can also be utilised by phyto-plankton (Cooper 1933). So it ap-
pears that It has been used up by the plants leaving behind only a
very small quantity in the water. But the question may arise
whether the plants consume directly the ammoniacal nitrogen being
"the earlier product of nitrogenous breakdown", or only alter its.
final conversion into nitrites and nitrates or in all states. A partial
answer to this query has been furnished by the recent experiment
of Harvey (1940) who found that (a) communities of diatoms could
use all the ammonia directly and (b) that they utilized all the ammo-
nium before any material quantity of the nitrate was used, although
the latter was 60 times more concentrated at the beginning of the
experiment and many times more towards the end. It appeared to
him that they used up ammonium in preference to nitrate although
the latter might be many times more concentrated than the former.
It is quite probable that the higher plants in the pond under investi-
gation, used up the ammoniacal nitrogen rapidly as soon as it was
iormed (Russel 1923) , so that there was either no limr or not suffi-

STUDIES ON PONDS IN THE MADRAS CITY

65

dent free ammonia left, for its conversion into iiitrites and
nitrates. That was probably the reason why neither nitrites nor
nitrates have been found at any time in the pond water. Even if
they had been formed their absence later can still be explained as
being most probably due to the action of denitrifying bacteria, which
are stated to be very active at higher temperatures such as those
recorded for the pond water (Pia 1934). Which of these processes
is taking place in the pond remains a problem which has to be
worked out generally for all tropical waters.

Again, a careful examination of the data for organic matter,
albuminoid nitrogen and the percentage saturation of dissolved
oxygon will show the intimate relationship that exists among them.
When the figures for organic matter and albuminoid nitrogen are
low, as in the hot weather period, the figure for percentage satura-
tion of dissolved oxygen is fairly high and when the first two factors
arc high as in the south-west monsoon season, the third factor is
comparatively low. These facts would, therefore, show, again,
that during the hot weather period, the formation of organic matter
was greuter than its decomposition, while in the south-west monsoon
season, the reverse was most probably taking place.

Summary

1. The seasonal variations In the physical and chemical condi-
tions of the surface water, for a year, in a cutrophic type of pond
resembling the littoral zone of temperate lakes and swamps of the
tropics, ore recorded.

2. The year during which the investigation was made, may bo
roughly divided into two periods: the first period, from February
to July ‘34, and the second from August "34 to January 1935; ana
the former may be considered as the period of the dominance of
production over consumption of oxygen and the latter as one of
dominance of consumption over production at oxygen.

3. Again in the first period, the temperature of water, dissolv-
ed oxygen, carbonates, pH and silicates were high, while the
bicarbonate total solids, total hardness, phosphates, ammoniaca!
nitrogen, albuminoid nitrogen and organic matter were low; and
in the second period, the temperature of water, dissolved oxygen,
carbonates, pH and silicates were low, while bicarbonatcs. total
solids, total hardness, phosphates, ammoniacal nitrogen, albuminoid
nitrogen and organic matter were generally high.

4. The presence of an abundant growth of plants must with-
draw most of the nutrient salts of biological significance from the

JOURNAL OF THE MADRAS UNIVERSITY

water. But yet most of them are present, at all seasons, in fairly
large amounts which can enable the growth and multiplication of
phytoplankton communities. The absence of any phytoplankton
and rarity of any zoo-plankton is therefore inexplicable. Further
work also is necessary to explain the presence in small quantities of
ammoniacal nitrogen, and the absence of nitrites and nitrates in b
pond of this type, in the tropics, where the possibilities of their
formation and utilisation arc great

The author wishes, in conclusion to thank Rao Bahadur Dr. C.
S. Govinda Pillay and Dr. P. Sadasivan for their interest in the
work and Dr. M. O. P. Iyengar for help in the identification of the
plants.

1. Aikbts, W.R.G. (1322 ) The hydrogen km cuaccnimUon ai natural
waters and of tome etching reagent* In relation to their action
on me tala. Tran*. Farad. Soc., Vol. U. p. 310-315.

Z Aifcuu, IVAG, <l*»-33)— The Chemistry of tea water in relation
to the productivity of the eta. Science Progress, Vol. 20,
page 296 -312.

3. Atkins. W.RXi. end Harris. G.T. (1924) -Seasonal change in the

water and llekoplankton of trash water pooda. Sc. Proc. Roy.
Dub. Soc., Vol. ■ (N.S.), pap* 1-21.

4. Bharad'ia.a, Y. (UKO)— Some avpect* of the atudy of the Myxo-

phyceae. Pica. Addreaa to Z7th Indian Science Congress. Mad-

5. Beadle. L. C. (1932-34) -Observations on the bionomics of aomo

East African swamp* Jl. Linn. Soc. (Bool.). Vol. 38, p. US-
55.

6. Carter and Beadle, L. C. (1930-52). -Fauna of the Swamp, of the

meat. JL Unn. Soc. (Zool.), Vol. 37, p. 20S-58.

7. Cooper, L. H. S. (1933).— Chemical subotances of biological importance

in the English Channel. Nov. 1930. Jan. 1932. Part 1, Phosphate,
silicate, nitrate, nitrite and anaemia. JL Mar. Bid As. U. K-,
Vol. 18. p. 677-728.

7a. Garupati, S. V. (1*10). -The Ecology of a Temple Tank containing
a permanent bloom of Jdicrocyrtu aemptnom (KUtt) Henfr. Jl.
Bomb. Nat. Hist. Soc.. Vol. XLU, No. 1, p. 65-77.

8. Harvey. H W. (1940) .-Nllrcgen and phosphorous required for the

growth of phytoplankton. Jl. Mar. Biol. As. U.K., Vo). 24,
p. 115-123.

9. Koiku-iu, R. (1914).— Uber die Ursacben der Planktoncntwicklung

in Lietensee. Ber. d. Deutsch. Bot G«, a 32, S. 639-00.

STUDIES ON PONDS IN THE MADRAS CITY

67

10. Pearsall, W. H. (1323).-^n* phymplankton of Roalhernc Mere,
Mem. Ptoc. Maneh. Lit and Phil. Sec., Vol. lxvil. No. 3,
p. 45-55.

U. Pin, J. (1934) . — Die KMkbfldung duich pOanzen. B. B. C, B. 52,
S. 1-72.

12. Ruutl, E. (1923). -The micro-organisms of the soil. Pub. Longmans

Green & Co., Ltd.

13. Welch, P.S. (1935). -Limnology, McGrsw Hill Book Co.. Inc.

TABLE I SHOWING THE METEOROLOGICAL DATA FOR
TOE Cm OF MADRAS DURING 1934
I Dally averages.)

Months.

Average

tor*

<F)

ill

111

£'«

Total

\ rainfall
(In Inches

Wind

velocity (In
mil. per
' day)

February 1934

.. 75 4

108

2 8

nil

152

March

.. 7*7

97

40

nil

185

April

.. HI

9 8

50

0 74

192

May

.. n-j

10 8

4-4

nil

205

June

.. Ml

• 2

8 2

1-78

187

July

.. 15 3

5#

8 3

2 07

165

August

.. 83-4

60

7 8

7-17

148

September

.. MI

80

6 6

2 00

168

October

.. 810

6-4

7-1

1082

109

November

.. 77 *

11

6-2

1 88

210

December

.. 74 0

7*9

5 9

2-19

235

January 1935

.. 75-3

76

5-5

0-57

ZU

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JOURNAL OF THE MADRAS UNIVERSITY

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STUDIES OX POXDS IX THE MADRAS CITY

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STUDIES IN INDIAN PAINTING

By

S. Paramasivan

Archaeological Chemist, Government Museum, Madras.

I

ANCIENT WALL PAINTING IN THE CAVE TEMPLES AT

MAMANPCR

In 1923 Prof. Jouveau Dubreuil reported the discovery of traces
of colour in the cave temples at MAmandOr.* which is situated
6 miles from Conjeevaram (12*81' N & 79° 43’ E). the ancient
Pnllava capital We owe these caw temples to the Pallava king,
Mnhendravarman I (590 — 620 A.D.) as Is proved by an inscription*
It is probable that the paintings also belong to the same period. It
may be pointed out that the architectural style and the richness of
the colour are identical with those at ftlttagnaviVial.*

Though the caves were once fully decorated with paintings
there arc only traces of paint now.

Experimental.

The subjects of those Investigations were the carrier, the
ground, the pigments and the binding medium.

Carrier.

From the traces of paint that are to be seen even to-day. It Is
evident that the ceilings, the inner walls and the pillars of the cave
temples served as the mechanical foundations for the paintings.
Their rough surface held the plaster fast.

1. Jouveau Dubreuil. Pallava Pabrtta*. Indian Antiquary m 0923>.
p. 45.

C. Minakshl. Administrate and Social Life under (he Pallava?
(Madras University Historical Series. 1938). p. 289.

2 T. N. Ramachandran. The Royal Artist. Mahendravnrman 1. Reprint-
ed from Joum. Ori. Res., p. 11.

3. Jouveau Dubreuil, Loe. Ctf.

STUDIES IN INDIAN PAINTING

71

Ground .

Microsections of ihe pointed stuccoes showed two lines of
cleavage separating three layers, namely, the rough plaster, the
fine plaster and tho paint film. The layers of fine plaster and the
paint film could be separated from each other by a sharp pin. But
no such separation could be effected between the fine plaster and
the rough plaster. Thus the binding between the fine plaster and
the rough plaster Is strong.

The rough plaster varies In thickness from 5-7 mm. to
11*8 mm. depending upon the inequality of the surface on which it
has been applied. The thicknesses of the fine plaster and the paint
film are 0-5 nun. and 0-3 mm respectively.

On mechanically separating Uic particles composing the rough
plaster and grading them according to size, 1 it was found that nearly
a fourth of them was less than 200 ji and another fourth was greater
than 700p. The re m ai n i n g particles ranged In size between 200p
and 700p.

The results of chemical analysis of the rough plaster are as
follow*:—

Chemical
Analysis
(Per cent)

Moisture

0-61

Carbon dioxide, CO a

7-95

Combined water and Organic matter

8 56

Silica, SiO*

53-21

Iron and Alumina, FcjOi+AIjOj

4 51

Lime, CaO

19-G9

Sulphuric Anhydride, SO*

019

Magnesia, MgO.

0-92

Undetermined (mostly alkalies)

1-56

The rough plaster is composed of lime and sand.

Itoraymto

other inert material 1 except sand, which has been specially added
to serve as such. A pure rich lime having no hydraulic properties
has been used and this shows that proper care has been taken in'
the preparation of lime for painting work. No organic binding

4. G. W. Robinson, SoJs: Their Origin. Constitution and Classification
(Mur by), 1332. pp. 12-13.

5. Proc. Ind. Acad. Sd., A. 1338. 7. pp. 286-87.

72

JOURNAL OF THE MADRAS UNIVERSITY

material like gum or glue has been added and llic consolidation of
the rough plaster has been brought about by lime.

The fine plaster consists merely of a lime wash.* From the
strong binding between the rough plaster and the fine plaster, it is
clear that the latter was applied while the former was still wet.

Pigments.

The following pigments have been identified 1 :—

Lime

Yellow ochre

Red ochre.

Terre verte.

Binding Medium.

There was no water soluble binding medium nor drying oil,
glue, albumin, or casein in the paint.' "Hie technique was one of
lime medium*

n

ANCIENT WALL PAINTINGS IN THE JAIN TEMPLE AT
TIRUPARUTTIKUNRAM.

Tiruporuttikunfam is situated about 2 miles from Conjecvuram
on tho right bunk of the river VegavatL It formed part of Con-
jeevuram from very undent limes. The temple Is of interest both
architecturally and on account of the paintings. 1

The ceilings of the front hall of the Vartlhamnna temple at
Tlruparuttikuoram bear a scries of coloured paintings which illus-
trate the life story of some of the Jain saints. The temple was built
in the 14th century A.D. and the paintings probably lielong to tho
late 14th century A.D. or the early 15th.' The paintings belong to

6. Proc. Ind. Arad. Sd.. A. 19». 10. p. 80.

7. Martin de Wild. Tbe Scientific Examination of Picture* (London, G.
Bell & Son*. Ltd.). IS®.

Technical Studies. 1935-26. 5. pp. ZJO-31.

8. Technical Studies. 1935-36. 4. pp. 135-44.

9. Proc. Ind. Acad. Sci., A. 1539. 10. p. 83.

1. T. N. Kamachandrar, Tbuparuttikuoren and Its Temple (Madras

Government Museum Bulletin), 1934, pp. 63-164.

2. T. N . Kamac h andrar.. Loc. Co, p. 29.

STUDIES IN INDIAN PAINTING

73

a type of folk art which was so common during the Vijayanagar
times.

The chemical investigations on the paintings were limited to
the carrier, the ground, the pigments and the binding medium.

Carrier

The paintings are to be found only on the ceilings which serve
as the mechanical foundations for them. The ceilings are construct-
ed of large slabs of hornblende-gneiss joined together by plaster.
Their rough surface has held the plaster fast. Not a little of the
damage to the paintings has been caused by the rain water percolat-
ing through the interstices between the slabs of stone, and soaking
into the plaster ground.

Ground

Microsections of tho painted stuccoes showed two lines of
cleavage separating three layers, namely the rough plaster, the fine
plaster and the point film. 'Die three layer* can be separated from
one another by means of a pin. TTius there Is no proper binding
between the adjacent layers.

The rough plaster varies In thickness from 2 m.m. to 5-2 m.m.
depending upon the nature of the surface on which It has been
npplied. The fine plaster and the paint film are each 0-3 m.m. thick.

The particles composing the rough plaster were mechnnicnlly
separated and graded according to she. It was found that half of
them was less than 2©0u and the remaining half varied In size from
200ii to 700u.

The results of chemical analysis of the rough plaster are as
follows: —

Chemical
Analysis
(Per cent)

Moisture

.. 0 84

Carbon dioxide, CO*

.. 709

Combined water and Organic matter

.. 3-38

Silica. SiO-

.. 71-47

Iron and Alumina. Fe«Q,-f Al-O,

.. 0-83

Lime, CaO.

.. 14-53

Sulphuric Anhydride, SO,

.. 0-11

Magnesia, MgO

.. 0 26

Undetermined (mostly alkalies)
10

.. 149